After speaking with the Government's advisory agency, it has been decided anyone still in Auckland would not be able to compete.
However, people who normally reside in the city but have already left will need to provide evidence of a negative Covid-19 test.
Spectators would not be allowed at transition areas of the course and the numbers of support crew will be restricted, with distancing protocols also put in place.
"We are extremely grateful to all those throughout New Zealand doing their bit to keep everybody safe," Bates said.
"The organisers are sad to say that we have lost key event staff and other personnel due to the Auckland lockdown.
"Should the situation deteriorate and we continue to lose more key personnel, the delivery of the event may become untenable."
Godzone teams will experience roughly 370km of mountain biking, 140 of paddling, and 170km of trekking throughout the wider Rotorua and Bay of Plenty region.
"We remain confident that we can deliver a truly epic chapter of Godzone," Bates said.
"Local iwi, Rotorua Lakes Council, our main sponsors and others have risen magnificently to the occasion and are working really hard to make things happen."
The race starts on Friday but the pōwhiri on Thursday has been cancelled.
Elsewhere, four international sport matches have also been cancelled following the Covid-19 restrictions.
"For the week ending February 21, spending activity in the Bay of Plenty region was down 7.4 per cent," he said.
Tauranga Chamber of Commerce chief executive Matt Cowley said it's peak event season right across the country.
The Bay of Plenty had a fully booked schedule and the alert levels forced them to cancel which was a big blow to accommodation, hospitality and retail sectors, he said.
While most businesses had set up good procedures for sudden alert level changes, Cowley said shifts had big psychological ramifications.
"Staff are concerned about their jobs and other personal matters. Business owners have to develop multiple strategies for a variety of risks that may not even happen," he said.
"We are overdue to revise our Covid-19 response strategy as we approach the one-year anniversary of the first lockdown.
"The sledgehammer approach worked last year, but it now needs to be more focused on the individuals and their close contacts."
A Tauranga motelier told the Bay of Plenty Times over the weekend there would be a "substantial loss of business" due to cancelled events.
"I had people check in on Saturday for the hockey for an eight-day stay and they checked out [Sunday] morning," Hospitality NZ accommodation sector Bay of Plenty chairman and Tauranga 850 Cameron Motel owner Tony Bullot said.
"This is going to have a huge effect on the economy."
Cancellations
• Rotorua Night Market for Thursday, March 4 cancelled;
• Godzone pōwhiri cancelled for March 4;
• Aotearoa Cuban Festival (March 6) cancelled;
• Waiata Mai (singing sessions at the library first Thursday of each month) is cancelled;
• All children's programmes at the library are cancelled until we are back in level 1, however, the youth and early learning team will be uploading a preschool programme to the library's YouTube and Facebook accounts;
Postponements
• 100 Women Rotorua galleria exhibition postponed from March 5 to March 11;
• Copthorne Rotorua Off-Road Half Marathon postponed from March 7 to March 28;
• Dairy Awards postponed from March 2 to April. New date to be confirmed;
• Ngāti Whakaue Whānau Day for March 7 has been postponed. New date to be confirmed;
Rotorua events impacted by the current alert level shift provided by Rotorua Lakes Council. The status of events may change over time.