Prime Minister John Key says he still believes John Banks is an honest man, but concedes his resignation from Parliament is the right thing to do.
Three days after being found guilty of filing a false electoral return Banks issued a statement saying he would quit as an MP, ending a political career which has lasted decades in central and local government.
He plans to vacate his Epson seat on Friday.
Banks could have stayed on as MP because no conviction was entered against his name last week, and his lawyer's request for a discharge without conviction was not due to be heard until after the end of the parliamentary term. MPs may then have had to be recalled to vote on whether a by-election should take place.
Key told Radio New Zealand's Morning Report programme Banks' decision to resign was sensible, and gave him time to look at how he might potentially clear his name.
"This allows him to take a step away from essentially what would have been process that would have been certainly messy for the ACT party and potentially a little bit messy for the centre-right of politics," he said.
ACT Party leader Jamie Whyte said he told Banks he thought he should resign but that it was his own decision to go. He said it would have been difficult for Banks to sustain his position if he had stayed, and he had done the right thing.