Marchers will not be allowed past Victoria Terrace having originally received permission to parade along it as part of a dedication for a loyalist arch in the town.
Two bands and around 200 people were expected to take part in the event, which the Parkmount Arch committee organised.
Nationalist residents had raised concerns with the Commission as they consider Victoria Terrace to be a part of Garvaghy Road, which has been at the centre of a parading dispute for the past two decades.
Despite a low-key annual march, the Orange Order has been banned from marching along Garvaghy Road since 1998.
After making its original decision, the Parades Commission had then requested further information from all parties involved.
A spokesperson on behalf of the Parades Commission said: "Following a review of its determination for this Saturday's proposed parade by the Parkmount Arch Committee in Portadown, the Commission has amended its original determination.
"This follows the receipt of fresh information, including representation on behalf of communities living in the immediate vicinity of the parade."
The statement added: "Having considered this new information, the Commission has issued a revised determination which includes a number of restrictions, including a restriction on route, prohibiting the procession from the lower stretch of the Garvaghy Road, past Victoria Terrace.
"These restrictions recognise the unresolved nature of parading in this area and the Commission considers that the restrictions are just and proportionate.
"The Commission would like to reiterate that this parade does not involve that stretch of the Garvaghy Road which has been subject to restriction since 1998."
The DUP's Upper Bann MP David Simpson said that he will be seeking answers from the Parades Commission over the decision.
Having initially granted permission for this parade they have now conducted an outrageous u-turn and caved at the first sign of opposition by the Garvaghy Road Residents Coalition.
DUP MP David Simpson
Mr Simpson said that he spoke with the Commission earlier via video conference from Westminster and has requested a further meeting on Thursday.
"Once again this Parades Commission has been characterised by its weakness," he said.
"The Ordinance Survey maps from Land & Property Services can demonstrate that this parade does not even pass along the Garvaghy Road but along Victoria Terrace. However the Commission appears prepared to believe whatever they are told by those who oppose parades.
"Experience with this Commission to date has been one of weakness and inconsistency. They appear to have no desire to actually move forward but simply to repeat, or even worsen, failures of the past," he claimed.
"This parade in Portadown should be allowed to pass unhindered. It is bizarre and deeply disappointing that the Parades Commission appear content to create a new problem in Portadown where none has previously occurred."
SDLP deputy leader Dolores Kelly has welcomed the reviewed decision.
The Upper Bann MLA said: "At last the Parades Commission has come to the right decision because this was nothing more than a cynical attempt by the applicant to up the ante and pull a fast one in advance of the annual Drumcree parade. Since the initial determination was issued, there has been increased tension and anxiety within the nationalist community.
"It was the right thing to do for the SDLP, with others, to seek a review of the initial determination and for the SDLP to have a face-to-face meeting with the Parades Commission to make the concerns clear and to seek clarity."
The SDLP remains committed to resolution of contentious parades through dialogue with those most affected. We hope there will be a peaceful marching season.
Dolores Kelly, SDLP MLA
Local Sinn Féin councillor Gemma McKenna said: "It's welcome news that the Parades Commission have listened to the views of local residents and elected representatives and produced a fresh determination.
"This ruling prohibits this new parade entering into the Lower Garvaghy Road and Victoria Terrace areas.
"We maintain the view that there is no rationale for any loyal order parade in this area," she added.
"I would call on everyone to do all that they can to reduce tension and to ensure we all have a peaceful summer."