There are many ways to remove your lawn. Some of the most common are: digging out the grass, cutting off the water supply, solarization (read more about solarization). Another method is the lasagna-method—laying cardboard sheets on the grass, covering it with mulch, wetting it down and allowing the whole thing to decompose over time. Please do what you can to avoid the use of chemical herbicides in your quest to go turfless.
The best method depends on the type of grass, whether it is in sun or shade and what will be planted in the new garden. It is easier to rid oneself of Bermuda in the shade than the sun, so taking it off life support in shady areas will probably work better than in the sun where Bermuda can survive on virtually nothing. If you expect to plant a ground cover, you will pay special care to removing weeds because they will be very difficult to control when you have to pick them out of the new plantings. Whatever method you use, Bermuda, nutsedge, oxalis and other weeds will probably require some ongoing removal.
Although California native plants do not behave quite like turf, there are several native plants that make nice, low groundcovers.
A mix of gramma grass (Bouteloua gracilis) and buffalo grass (Buchloe dactyloides) is an interesting, partially native turf. Yarrow, Achillea millefolium ‘Rosea’, can also be used as a turf substitute (see Lummis House in Los Angeles). It can take limited foot traffic but will not provide a durable walking or play surface. Clustered field sedge, Carex praegracilus, is another native turf substitute. This looks more like a dense, dark lawn, but it requires water, though probably less than traditional turf grasses. Recycled concrete, flagstone, decomposed granite or other inorganic surfaces can also be used for a low maintenance garden area that takes foot traffic. Permeable, inorganic surfaces reduce urban runoff that is responsible for coastal pollution.