Payten said the NRL premiership winner's departure was "bittersweet" after five years in Townsville, but would help the club in the long run by freeing up salary cap space.
Holmes, who has scored 35 tries in 93 appearances for the Cowboys and won Dally M Centre of the Year in 2022, will join St George Illawarra from 2025 on a three-year deal after he was released from the final year of his contract.
"It's bittersweet but in the end it was a business decision," Payten said.
"He was looking to get a long-term deal done and we weren't in a position to extend him out for what they were looking for."
With his $1 million-plus contract no longer weighing down North Queensland's books in 2025, Payten has more headroom to tie down some of the club's rising stars.
Holmes has been one of the NRL's top centres in recent years, but North Queensland have an embarrassment of riches in the position with Tom Chester, Zac Laybutt, Viliami Vailea, Braidon Burns, Robert Derby and Semi Valemei all vying for a starting spot.
"There's some options there for us," Payten said.
"What it also allows us to do is to upgrade and extend Reubs (Cotter), get Griff's (Griffin Neame) contract done, Robbo's (Reece Robson) the next piece of the puzzle.
"We've got a couple of veterans we're looking at for next year too in Macca (Jordan McLean) and Feldty (Kyle Feldt). So there's a whole gamut of reasons as part of the decision."
Payten has been in a ruthless mood this week.
His austerity drive comes after he swung the selection axe on veteran halfback Chad Townsend following an uninspiring showing in his side's collapse against Brisbane.
Jake Clifford has been named in his place for Saturday's crucial clash with Canberra, with his previous NRL experience giving him an edge over fellow Queensland Cup half Thomas Duffy.
The Raiders will be fired up after a disastrous outing of their own against Manly last time out.
Their 46-24 home defeat leaves them likely needing to win all four of their remaining fixtures to make the finals, with 32 points the target for the top eight if last year is anything to go by.
"It might even be 34 with how tight it is," said Raiders hooker Tom Starling.
"Look, we've got to win every game and that's what we're focused on.
"We got a tough run home but we're going to welcome the challenge."
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