Ireland are without injured wings Tommy O’Brien, Shayne Bolton and Mack Hansen, while Jacob Stockdale is an option on the left wing for Farrell.
In Lowe’s absence, the versatile Jamie Osborne has been handed the 11 jersey for Saturday’s opening Nations Championship game against Australia in Sydney (11:10 BST).
Ireland will also face Japan and New Zealand in July as preparations continue towards the 2027 World Cup, which will be held in Australia.
Farrell added that Lowe, who made his Ireland debut in 2020 after qualifying under the residency rule, is a “larger-than-life-character”.
He added that it is “not my role” to be involved in contract negotiations.
“He’s a brilliant player, but we all know sport and the ins and outs and the intricacies of all of that,” Farrell said about Lowe’s contact situation.
“They become complicated from time to time and sometimes it works out, most of the time it works out for us, fortunately.
“But this time, obviously it didn’t. I know that James is delighted with the contract that he got in the end and he’s on to a new venture.”
Farrell said that Lowe will be “thoroughly missed” but “we have to move on”.
“Somebody has to step up and take that mantle that James has done over the last number of years, superbly for Ireland.
“But at the same time, it’s the same every campaign, every year. Something happens that takes you by surprise a little bit, and I suppose it’s the same as us missing Caelan Doris on this tour, Ryan Baird on this tour, Paddy McCarthy, all of that.
“That’s just rugby and that’s just life and the stars didn’t align for whatever reason.
“I certainly wish him all the best. I have done. I thanked him for everything that he’s done for Irish rugby.”
