"I did say 'are you sure this is what you're going to be doing?' but it was his decision," Luxon said.
"It's sad to see him go but I fully understand his reasons for doing so, and for doing so now."
A new finance spokesperson is expected to be announced this morning.
Speaking earlier on the AM show, Luxon said he was sad to see Bridges go, but understood his reasons for pursuing another career in the commercial world.
"For what it's worth, I think he's going to be outstanding at it."
Bridges had been a great champion of Tauranga for 14 years, a senior MP, National leader and an effective finance spokesman, Luxon said.
"A top guy, a talented guy and he's going to do well."
Luxon thought a great candidate would emerge in Tauranga to replace Bridges and they would work hard and win the seat.
The selection process would take a few weeks before it was announced.
Questioned about the Māori representation in the National Party – which was down to two MPs after the loss of Bridges – Luxon acknowledged there was work to do.
He said there was not enough diversity in the National party, and attributed this to getting "smashed" at the last election, which took out many MPs.
"I know we've got work to do and relationships to build, and that has to start somewhere."
Bridges told TVNZ's Breakfast while he "might look with a bit of envy to the next National Finance Minister", he had no regrets leaving politics.
"This had been factored in but the other factors were stronger."
Two of his children were turning 10 and 8 this week and had never known a life where their dad was not in politics and spending a lot of time in Wellington.
Bridges assured he was not leaving behind any scandal and was quitting politics on his own terms.
"If there was, I'd stay in Parliament and fight it. I wouldn't skirt away from those things."
The timing was good because it allowed Luxon plenty of time before the next election to establish another finance spokesperson, he said.
Bridges told Newstalk ZB's Mike Hosking he had some serious things he wanted to do, and was exploring commercial business opportunities, selling his family home in Tauranga and hoped to work on media projects.
"I like writing, and I would be looking around at what I can do in that area and where I can add value," said Bridges.
He agreed that politics was not the be-all and end-all.
"There are other ways that one can contribute and do a lot so I am looking forward to that in business."
He said being an electoral MP was hard work and listening to constituents could take a lot out of an individual and their family.
"I don't think there are hard and fast rules but I do think when you get to a point where there are more days where you've had enough you should get out."
He was looking forward to spending more time with his family and being able to be at home in his own bed every evening.
Winston Peters had a chance of taking the Tauranga seat in the next election, he said.
Bridges told RNZ he had been thinking about leaving for a few months and had weighed up the pros and cons with his family.
He had made his decision based on his own personal reasons, but the latest poll reinforced things and the signs were it was going to be a very competitive election next year.
He couldn't elaborate on what he would be doing, but there were some commercial projects in the pipeline as well as one or two media projects.
Bridges had enjoyed writing over the past couple of years and had a unique perspective.
"I've turned my hobby and love into my profession and I'm looking forward to turning it back into a hobby and being able to talk about it."
On his book, he said he enjoyed that and it was part of a longer process for him that showed him there were a lot of other exciting things going on that they forget about in Parliament.
When asked if he had made up with Judith Collins, he said he wouldn't go that far.
Bridges said he was proud of helping new New Zealanders get citizenship, helping build infrastructure, the Kaikōura State Highway rebuild and spearheading energy transition.
He thought National could win and that people trusted it with the economy. He thought the risk of a recession was quite high and that would put National in a very strong position.
Speaking to AM, Bridges hinted towards some political commentary and said they were getting warmer when asked about getting involved in some form of entertainment.
He dispelled all rumours of being in Dancing with the Stars, saying he had no natural talent in that area.
He said there had definitely been highs and lows, but he wouldn't swap out the lows as they helped build character.
He would miss politics, but his older two children were excited because for all of his children's lives he had been away for four to five nights a week.
Bridges believed National would address diversity in the next election and new people would come in.
When asked if he could do any career he wanted, he said as a child he wanted to be a conductor of a symphony or in his older years be a cranky talkback host on a late-night show.
Bridges had been a member of the party for 30 years and said he believed in Luxon.
Bridges said it was "too early" to say if he'd been offered another job.
At age 45, he said he was looking forward to his best years and spending more time with his children.
