There are a couple of ways you can go with this project. But one way or another, the sod has to go. If you don't get rid of it now, you'll be pulling it as weeds for a long time.
The first route is to rent a sod stripper and cut the sod out. Another option is to use a nonselective herbicide product containing glyphosate to kill off everything in the area and then use a tiller to work up the soil.
There are pros and cons to each possibility, depending on the size of your project, your inclination for hard work and how you feel about using chemicals.
