It's used to tell someone to stop thinking about or worrying about something, often in a dismissive or reassuring way.
Here are some examples:
* "Olvídate de la tarea. Ya la harás mañana." (Forget about the homework. You can do it tomorrow.)
* "Olvídate, ya pasó." (Forget it, it's over.)
* "Olvídate de él. No te merece." (Forget about him. He doesn't deserve you.)