Deaccessioning can be complicated, but your life will be much less difficult when you obtain two of the main collections care reference books. First, Museum Registration Methods 5th Edition (sometimes called the Registrar’s Bible) has an excellent chapter on Deaccessioning. The other book you need is A Legal Primer on Managing Museum Collections by Marie Malaro and Ildiko DeAngelis. Again, there is a substantial chapter on Deaccessioning.
Although transferring deaccessioned objects to another institution sounds like the preferable method of disposal, we need to remember that museums in the US are public trusts and like the board of any other trust, the museum board is legally obligated not to reduce the value of the trust (i.e., the collections) for no return. Thus sale, particularly of more valuable materials, is seen by most boards as the preferably action in terms of their fiduciary responsibility.