Take teleporter to Indigo Hollow and exit the city. If you do not (or cannot) take the teleporter, leveled assassins will continue to spawn and attack you. If you die, the respawn point is where you were going anyway. :-)
Meet Reverend Valac just outside the city, on your left at ( -640, -53, -34 ) Copy/waypoint -639.61, -53.49, -33.66 and speak to him.
NOTE: You can not change your mind after this step.
Clean out and relinquish your home as you will not be able to easily get back into the city to do it later. With LU35 and the moving crates, this step is no longer necessary.
Your faction with City of Neriak will be set to -50,000.