Rotation was going to work on the following basis:
Ranked legality would be based off of which sets were in the store, and only the two most recent "blocks" would be in the store at a time. Each "block," one faction would no longer receive any new cards to make room for the introduction of a new faction. This would mean that eventually that faction would no longer be ranked legal. There was a chance that the faction would be brought back in the future, but no guarantees. Your cards wouldn't disappear and they would always be legal in non-ranked constructed.
When Yodo1 joined up with LM, all plans for rotation were called off. While I personally think this was a mistake as it prevents the release of new factions (with only 100 cards a set and 8 factions plus factionless it's already pretty crowded--just imagine adding more), but that's their call at this time. The Sleepers of Avarrach were going to be the first faction to be rotated out, but a new SoA card has already been previewed for the next set.