Vivid Sydney has pulled the plug on a popular light show after 89 drones suddenly plummeted into the ocean as shocked spectators watched on. 

Following a technical and safety assessment, organisers announced on Saturday the remaining Star-Bound drone shows had been cancelled. 

'We understand this will be disappointing for audiences and appreciate the public's understanding,' Vivid Sydney wrote online.

'Fireworks displays will now complement the Laser Lightfall experience in Darling Harbour at the times previously scheduled for drone shows, adding another layer of spectacle to Vivid Sydney's celebrations.'

The 9.30pm drone show was cancelled last Monday after 'unforeseen technical difficulties' during the 7.30pm session caused the drones to suddenly plummet. 

Vivid cancelled subsequent shows on Tuesday and Wednesday night while a technical and safety review was carried out.

'We apologise for the disappointment and inconvenience caused to attendees,' a Vivid Sydney spokesperson said.

'Public safety is always the number one priority and a full assessment is now underway with the specialist operators and relevant government agencies advising on next steps.'

A worker at Darling Harbour told ABC Local Radio there appeared to be a 'cascading failure of the drones'.

'Everything seemed normal and then very shortly after that first image was displayed, on the southern side of Cockle Bay you started seeing drones dropping in the water,' he said.

The drone show's operator, Sky Magic, said 89 drones landed in the waters of Cockle Bay, and that the incident had been caused by an unforeseen change in the radio frequency environment.

'No vehicle escaped the safety boundary of the show parameters and the reaction of the pilots and crew were timely and appropriate in accordance with our operations manual and processes,' the company said.

'Some vehicles during the emergency landing phase encountered the geofence boundary and shut down to preserve the safety zone, resulting in them falling into the water.'