The hardboard siding that was commonly used on homes 20 to 30 years ago is very prone to water damage, so replacing it is a very common chore.
The first step is removing the rotten siding with a flat bar. Often, you only need to replace a few bottom courses, because these are the boards that get the most water damage from rainwater splashing up from the ground.
Driving nails all the way through the last good row with a nail set will free up the damaged row beneath it so that you can remove it.
I always recommend fiber cement material to replace hardboard siding, because it’s easy to find in matching sizes and textures. And, since it’s made mostly of cement, it won’t ever rot or decay like the hardboard.
You just nail it up, so the courses match the rest of the siding, and before long you’re ready to paint.