Starting March 27, all Hangouts users who have enabled SMS in Hangouts will receive an in-app alert notifying them of the change. The alert will prompt users to choose a different default messaging app from among the ones they have on their phone. Users who don't have another messaging app on their phone will be directed to the Play Store to download one. Options include Google's own Android Messages app and dozens of 3rd party apps like the popular Textra.
This change is not surprising. Google is re-purposing Hangouts as an IM and video conferencing app for businesses and it makes sense to remove unrelated functions from Hangouts.
Google Voice SMS and MMS will not be affected, at least for now. Hangouts will still support Google Voice messaging and VoIP calling after May 22. But I don't expect that to be true forever. In January a new version of the Google Voice app was released that for the first time supported MMS in addition to SMS. At that time, Google told 9to5 Google, that it was working on adding VoIP calling to the Google Voice app. I suspect that once the Google Voice app is able to handle Google Voice VoIP calls, Google Voice support will be dropped from Hangouts.
Source: Reddit via The Verge