The Nationals retained all their seats at the federal election under Mr Joyce, but his leadership was challenged by David Littleproud and Darren Chester, with the former ultimately being successful.
Mr Joyce says he will remain the member for the NSW seat of New England for the full term, calling the loss of the leadership earlier than expected "a weight off my shoulders".
"I always said I was transitioning out of the leadership, and that's what I was going to do," he said.
"I obviously didn't want to do it yesterday, but that's life, it's politics."
Mr Joyce says while he believed he was in a strong position to negotiate the new coalition agreement as the Nationals push for extra representation in shadow cabinet, Mr Littleproud would do a good job.
"Obviously you back yourself in. I know how to negotiate and walk into these things as a business person," he said.
The former leader lauded his negotiation skills after bargaining a near $30 billion concession from Scott Morrison to sign up to net-zero emissions ahead of the election.
"I'm a little old bush accountant. I know how to do a deal," he said.
Mr Littleproud says the incoming leadership is best placed to take back government at the 2025 election but he will still draw on the experience of Mr Joyce.
"This isn't a reflection on the achievements of Barnaby Joyce in any way, shape or form," he told AAP.
"This is just about who was prepared to lead in 2025 and not have to shift leadership teams halfway through (the term).
"We wanted to have continuity from today, to have a stable leadership team right through, to be able to also have a team around that we'll take towards 2025."
NSW senator Perin Davey was elected deputy during a marathon two-and-a-half-hour partyroom meeting on Monday, edging out NSW MP Kevin Hogan and Victorian member Anne Webster.
Victorian senator Bridget McKenzie will remain in her role as Nationals leader in the Senate.
Mr Littleproud said the Nationals would continue fighting for regional Australia.
"I want to make sure we get our fair share. If we don't, you'll hear from me," he said.
While the Liberals and Nationals need to remain in coalition to form a viable alternative government, neither party needed to compromise on its core values, Mr Littleproud said.
"We respect the fact we can't win government by ourselves and the Liberals can't win government by themselves, so a strong coalition is important," he said.
"But respecting each other's values and principles is important in achieving that. If we do that, I'm sure we'll have a very strong alternative to the current government."
Mr Joyce rejected arguments the strong stance of he and his colleagues on coalmining was a drag on the Liberal vote, despite acknowledging throughout the campaign he was not popular in the inner cities.
"If you're the Liberal Party and in a suburban seat, then ask yourself the question: 'What went wrong for me?'. Don't start looking around for somebody else to blame," he said.
"You're not really facing up to your own dilemma.
"The other thing is you're just up against an 'it's time' proposition.
"People change the curtains sometimes not because the curtains don't work, they're just sick of them."
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