The functionality is different with Kitkat as you can choose your default SMS application in the Wireless & Network settings. Below is for 4.4 and for 4.3 and below. Open the google-plus-hangouts application.

For Android 4.4+ (Kitkat) (As per the above):

Click on Menu then Settings.

Click on SMS.

Click on the setting "SMS Enabled" under the General heading and change your default SMS application.

For 4.3 (Jelly Bean) and Below:

Click on Menu then Settings.

Click on SMS.

Untick the setting "Turn On SMS"

The functionality is different with Kitkat as you can choose your default SMS application in the Wireless & Network settings. Below is for 4.4 and for 4.3 and below. Open the google-plus-hangouts application.

For Android 4.4+ (Kitkat) (As per the above):

Click on Menu then Settings.

Click on SMS.

Click on the setting "SMS Enabled" under the General heading and change your default SMS application.

For 4.3 (Jelly Bean) and Below:

Click on Menu then Settings.

Click on SMS.

Untick the setting "Turn On SMS"

_{(source: cbsistatic.com)}