The event involves students driving balloon-covered cars through the central area of the capital on the way to their school prom.
Social pressure dictates they arrive in the glitziest or most unusual vehicles. Students hire limousines, Mercedes, BMWs, as well as tractors and dustcarts.
But council officials have demanded the ban because of a recent craze among teenagers for leaning out of the windows of speeding cars or balancing on their bonnets, which has led to several accidents.
Minko Vassilevski, head of a business in Sofia, said he hoped the ban would make the young people realise that "their best holiday is not about the flashy rides" and that they should be showing off their outfits and hairdos instead.
Some students are considering suing the city council for money wasted on limo deposits.
One student, Alexander Nikolov, said: "If they want to close down the streets to everyone, so be it. But if they only plan to stop young people wearing suits from driving in cars, then that's definitely in violation of our rights."