Google is sending out email to Google admin users informing them that Hangouts SMS integration will stop working after May 22, 2017. The company will presumably roll out an update on the day that will disable the SMS integration functionality on the app.
Google notes that it is making this change to better suit’s Hangouts renewed focus on enterprise users and to offer a better experience for group chats and video meetings.
To prepare users for this change, Google will also be showing an in-app notification to users starting from March 27, 2017. The app will automatically prompt users to select a new default messaging client installed on their device. If no app is found installed, users will be redirected to the Google Play Store to download the Android Messages app. Users who do not use the Hangouts app as their default messaging client will not receive any notification.
This change does not affect Google Voice users in any way as their messages will continue to show in Hangouts post May 22.[Via /r/Android]