Terraformer removes obstacles for construction on cells – those can be Lakes, Trees and Rocks. After the terraformation have been completed the Terraformer self-destroys and you can construct buildings on the freed cell.
Terraformation takes some time. If you point at a Terraformer you will see how much time left until the terraformation ends in the pop-up window. The higher Terraformer’s level is the faster terraformation ends.

Level						Terraformation time
1	0	5000	800	20	0	4 days
2	0	2000	500	0	0	1 day