Decomissioning is when an agent reaches ages 13+ and gets his/her memory erased of anything having to do with KND. This process in conducted by Numbuh 86 and the Decommissioning Squad. The agent is placed into the Decommissioning Chamber, and is set free.
During Operation: E.N.D., Chad hacked into the Moonbase's characters to make Numbuh 86 believe that Sector V had reached the age of 13 and were ready for decommissioning.
He in fact was hoping to avoid being decommissioned himself, as he in fact had reached the age of 13. After Numbuh 1 discovered invitations to his 13th birthday party, Chad was taken into custody for the procedure before being rescued by Cree.
According to Operation: Z.E.R.O, Number 0 was the one that invented this procedure. The process was first used on Grandfather, who immediately lost his powers and thus freeing the kids underneath his control.
The second time Grandfather was decommissioned, each of the KND members and the villains that he had turned into senior citizombies were transformed back into their regular selves as a side effect of him losing his powers once more.