For safety reasons, stop wrapping your baby when they show signs of starting to roll onto their tummy. This is often around 3-4 months, but may be earlier. If a wrapped baby rolls to their side or tummy, they might not be able to roll to their back. Sleeping on their back is the safest sleep position for young babies.
Generally, the best way to stop wrapping is to do so slowly. This can be done by leaving one arm out of the swaddle. From there, progress to leaving both arms out of the wrap. This slow and gentle transition makes it easier for your baby to adjust to sleeping unwrapped. The process may take a week or so, and your baby's sleeping pattern may change a little. Don't worry- this is common. Once your baby is used to sleeping unwrapped, things should return to normal.
When using a sleeping bag, make sure the sleeping bag is the correct size for your baby. Choose one with a fitted neck, armholes, or sleeves. Make sure that it has no hood, and check your baby can't slip inside the bag and become completely covered. Dress your baby the same way you would if using a wrap (or according to the sleeping bag manufacturer's instructions). Never use a wrap and sleeping bag together, as your baby may overheat. In cooler months, you can add a sheet or lightweight blanket, tucked in firmly over your baby and the sleeping bag, as you would if they were wrapped.