Heterogeneously integrated AlGaN epitaxial layers will be essential for future optical and electrical devices like thin-film flip-chip ultraviolet (UV) light-emitting diodes, UV vertical-cavity surface-emitting lasers, and high-electron mobility transistors on efficient heat sinks. Such AlGaN-membranes will also enable flexible and micromechanical devices. However, to develop a method to separate the AlGaN-device membranes from the substrate has proven to be challenging, in particular, for high-quality device materials, which require the use of a lattice-matched AlGaN sacrificial layer. We demonstrate an electrochemical etching method by which it is possible to achieve complete lateral etching of an AlGaN sacrificial layer with up to 50% Al-content. The influence of etching voltage and the Al-content of the sacrificial layer on the etching process is investigated. The etched N-polar surface shows the same macroscopic topography as that of the as-grown epitaxial structure, and the root-mean square roughness is 3.5 nm for 1 mu mx1 mu m scan areas. Separated device layers have a well-defined thickness and smooth etched surfaces. Transferred multi-quantum-well structures were fabricated and investigated by time-resolved photoluminescence measurements. The quantum wells showed no sign of degradation caused by the thin-film process.