The Asia-Pacific region has lost a great ambassador for trade and economic reform with the resignation of John Key, says Malcolm Turnbull.
The New Zealand prime minister announced his resignation on Monday after eight years in office and 10 years at the head of the NZ Nationals.
Mr Key, whose government faces an election next year, said he wanted to leave on his own terms and spend more time with his family.
Mr Turnbull sent his counterpart across the ditch a short text message when he heard reports of the imminent decision.
"I sent him one very short message: 'Say it ain't so, bro'," Mr Turnbull told reporters in Melbourne.
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Mr Key had been inspiring and would be a great loss to his country and the world, he said.
"What he has been able to do is demonstrate that if you make the case for reform clearly, cogently, persuasively, you can win and retain strong public support for economic reform.
"He has been a great advocate for trade and he has been a great example of a reforming leader."
Labor leader Bill Shorten described Mr Key as a "civilised conservative".
"During John's tenure Australia and New Zealand have worked side by side on the battlefield, during times of natural disaster and global economic challenge. Australia is fortunate to have New Zealand as a steadfast ally and friend," Mr Shorten said in a statement.
"In an age of political turbulence, John Key leaves on his own terms. As ever, he is thinking about the future. "
Former prime minister Tony Abbott said it had been a "fine innings".
"Not many pollies retire unbeaten on a double ton," he tweeted.
Former treasurer Joe Hockey said he had enjoyed working with Mr Key.
"Your country is stronger and richer," he said.
The NZ National Party will hold a special caucus meeting on December 12 to choose a new leader, who will take the government to an election due no later than mid-November 2017.
Betting markets have deputy leader Bill English as favourite to be the next leader.
