You can read more about the new Erase Assistant in macOS Monterey in Apple’s support document here. The currently installed macOS version will remain.

Like iOS, the new erase process in macOS Monterey handles everything to fully wipe your Mac.

Follow the prompts to fully erase your Mac.

Click System Preferences in the menu bar > Erase All Contents and Settings.

If you haven’t upgraded already, it’s easiest to factory reset a Mac that’s running Monterey. MacOS Monterey offers an all-new Erase Assistant for 2018 and later Macs. Shortcut: You can also search your Mac for “erase” with Spotlight search (magnifying glass in top right corner or use keyboard shortcut cmd + spacebar) macOS Monterey: How to reset your Mac

Enter your password if required, then follow the steps to reset your Mac.

Now click Transfer or Reset > Erase All Contents and Settings.

Open the System Settings app on your Mac.

How to reset MacBooks and Mac desktops macOS Ventura: How to reset your Mac

Reset MacBooks and Mac desktops on macOS Big Sur or earlier.

How to reset laptop to factory settings