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Pop singer CMAT says she is pulling out of the Latitude Festival in Suffolk, in protest at the event being sponsored by Barclays Bank.
It follows a similar action at Brighton's Great Escape Festival in May, where more than 100 artists pulled out over Barclays' involvement.
Campaigners have accused the bank of increasing its investment in arms companies that trade with Israel, amid the ongoing war in Palestine.
"I will not allow my precious work, my music, which I love so much, to get into bed with violence," said CMAT in a statement.
Barclays has previously stated it recognises the profound human suffering caused by the conflict in Gaza.
A spokesperson said the bank does not make its own investments, but provides financial services to businesses "including those in the defence sector".
CMAT, whose real name is Ciara Mary-Alice Thompson, said she had asked Latitude to find another sponsor.
"This has not happened and it has been made clear to me that it will not happen," she wrote on Instagram.
"As such, I am now officially pulling out."
She apologised to fans who had bought tickets specifically to see her, and said she hoped to "make it up to you somehow".
Welsh singer Georgia Ruth has also withdrawn from the festival, saying that Barclays' investment in the arms trade "must be challenged".
She said she was inspired to take a stance by Charlotte Church, who boycotted last week's Hay literary festival.
Church, comedian Nish Kumar, economics author Grace Blakeley and Labour MP Dawn Butler all pulled out of speaking engagements at Hay because one of the principal sponsors is the investment management firm Baillie Gifford.
The campaign group Fossil Free Books said Baillie Gifford invests in companies "linked to the Israeli military" and Israeli settlements in the occupied West Bank, as well as a number of major fossil fuel companies.
Baillie Gifford said the "suggestion that Baillie Gifford is a large investor in the Occupied Palestinian Territories is seriously misleading".
It is a large investor in several multinational technology companies, such as Amazon, NVIDIA and Meta, which have "commercial dealings with the state of Israel that are tiny in the context of their overall business", it said.
It is also a "small" investor in "three companies that have been identified as having activities in the Occupied Palestinian Territories", it said, adding: "We are committed to responsibly analysing and engaging with the companies in which we invest. This work is ongoing and progress has been made."
On Friday, with the festival already under way, Hay's organisers said they were ending their sponsorship deal with the company.
Chief executive Julie Finch said the decision had been taken “in light of claims raised by campaigners and intense pressure on artists to withdraw”.
In her statement, Ruth said the "effective boycott" had proved that artists "can make a difference" and urged Latitude to cut its ties with Barclays.
The BBC has approached both the festival and the bank for comment.