Remove the grips and chuck it in a bucket of oil. The luger, not the grips and the holster.
Let the grips air dry. Forced drying may crack them.
If the pistol was in the water a short time, it may be ok, but expect major rust issues if it spent a lot of time in the water. Not much can be done, except removal of active rust. Marks will be left and the gun will never return to what it once was.
Come to think of it:
When the grips are removed and the pistol is submerged in an oil bath in a closed container, that should give it good protection against flooding for a while? Even storing it in an air tight (vacuum) enclosure should work?