"The Vatican decided to exclude Daniela Mercury from the cast not because of her convictions about contraceptives even if they are not in agreement those of the Catholic Church," said Father Giuseppe Bellucci, a priest who organized the show.
"She was excluded because she had announced that at the concert she would openly promote the use of condoms to fight the plague of AIDS," he told a news conference presenting the benefit concert, to be held on Saturday night.
Mercury, who is an ambassador for UNICEF and the U.N. anti-AIDS program, had been invited to sing several songs as part of an international cast that includes South African singer Miriam Makeba and Ireland's Dolores O'Riordan.
"The convictions of a person are one thing but making statements like these are another," Bellucci said.
"We have to remember that the performers, the promoters and everyone else at these things are guests of Vatican City and we have to abide by the rules of the hosts," he said.
The concert is a traditional fund-raiser for charities. It is not attended by the Pope but is attended by dozens of cardinals and other top Vatican officials.
It is then broadcast on Italian television on Christmas Eve.
Mercury said in a statement last week that she regretted the decision but had the right to disagree with the Catholic Church's opposition to using contraceptives as a way of stopping the spread of sexually transmitted diseases.
At the 2003 concert U.S. Hip Hop singer Lauryn Hill shocked Catholic officials by telling them to "repent" and alluding to sexual abuse of children by U.S. priests. Her comments were cut from the recording and not broadcast on Christmas Eve.
The Church opposes the use of condoms except in the rarest of circumstances because they are a form of contraception.
It says that fidelity within heterosexual marriage, chastity and abstinence are the best ways to stop the spread of HIV/AIDS.
The Church says promoting condoms to fight the spread of AIDS fosters what it sees as immoral and hedonistic lifestyles and behavior that will only contribute to its spread.
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