Remove Time Machine From External Hard Drive?

Turn off time machine, and then use "Disk Utility" in the "Utilities" folder to erase the drive. You can then set up TM on a different drive.

Do you have to erase the drive or can I just delete Backups.backupdb? Cause I have other files on my external drive that I don't want to lose - I only want to get rid of TM as well. Thanks

Firstly, if you want Time Machine to not back up to that hard drive anymore, you need to go into your System Preferences (either on your dock, or in your Applications folder). Click on the "Time Machine" icon in System Preferences, then click "Change Disk." In the window that drops down, you can either click on your other hard drive or select "None" and change this to your other disk afterwards. When you choose a different disk, TM automatically stops doing the backups to the first disk.

Also, if you want to remove all those backups you made, then, yes, you really only have to delete the folder (unless you want to, not just free up the space, but utterly destroy all those files so that they are permanently non-retrievable, for some reason). Another option is that you could copy and paste that folder over to your other disk (not loose all those files you backed up).