He had initially signed a three-year contract at Scotstoun last summer but it contains a break clause at the end of the first year.
And while Townsend is disappointed to see that clause exercised, he wouldn't begrudge the 24-year-old a shot at playing for Australia again.
"We were always aware that it could happen," Townsend said. "I think that he's done really well and he has settled well, but he's made that decision to go back to Australia.
"The fact he played a Test match before the World Cup - that's obviously a big draw, to try and get back in the Australian team, which he wouldn't have been able to do if he'd stayed with us.
"He's fitted in well. Him and Leone [Nakarawa] became best friends, he's worked hard, and we've seen some cracking performances from him.
"We know there's still a bit of improving to do, and we really want to work hard with him over the next few months so he gets into the team, fights for his place in the team and plays well."
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