What does the seam on the hem look like? Is it knitted separately and sewn on? (If so there should be a seam on the underside). Or is it knit down from the body of the sweater? Both are removable but how you do it depends on the construction. If it's sewn on, you would need to carefully pick out the seam, and the resulting edge should already be finished (at least, inasmuch as it will not start to unravel). If it's knit down from the body the edge will unravel, and it will have to be bound off or stitched into place.
Be aware that when you remove a band or ribbing from a sweater, what is left may curl, and it may curl a lot. (Like, you could lose an inch or two of length at the bottom in addition to the hem.) Sweaters are often finished with ribbed hems for this reason because ribbing does not curl and stockinette stitch (the "normal" flat knitting) curls like mad. So you might want to consider a folded hem instead. The easiest way is actually as Ramya suggests, just fold the band inside and tack it down w/ a couple of stitches. Since it looks like a split band it should not make the bottom too narrow.