Start from layer three (top layer) with the terraforming tool and work your way dosn by level! Make sure there isn’t anything on the layers because this will make it so you cannot break the cliffs. Also be sure to close up any water areas you find first!
you have to be standing one level lower than the level that you want to get rid of. For example if you want to get rid of the third level, you have to be standing on the second level and facing the third level's cliff to start destroying the third level (picture not mine):