The Gauss-Elemination method is used to solve systems of linear equations by reducing the system to upper triangular form using elementary row operations. It works by first making the coefficients of the variables above the main diagonal equal to zero one by one, then back-substituting the solutions. The method is illustrated using a 3x3 system that is reduced to upper triangular form by subtracting appropriate multiples of rows from each other. The unique solution can then be found by back-substituting the values of z, y, and x.