This feature puts all of the files stored either on the desktop or in the documents folder in iCloud, making them available on iOS devices, Macs, and iCloud.com for easy access to your most recent files wherever you are.
Turning on the new iCloud feature is done when setting up macOS Sierra. When you install the new operating system, Apple will ask if you want to enable iCloud storage for the desktop and documents folder and will let you know how much iCloud storage space it will take up.
If you have a lot of files on your desktop or in the documents folder, it can take up a significant amount of space, so you might need to do some file cleanup before enabling it.
If you want to enable the feature later or turn it off at some point, you can do so by going to System Preferences --> iCloud --> iCloud Drive --> Options ---> and checking or unchecking "Desktop & Documents Folders" in the list of apps allowed to upload data to iCloud Drive.
On Macs and iOS devices, the contents of the desktop and documents folder can be accessed through the iCloud Drive app. On iCloud.com, the files can be accessed through the iCloud Drive folder that's available once you're signed in. If you have a Windows machine, your Mac files will be able to be downloaded through the iCloud for Windows app.
The new iCloud storage options in Sierra bring Macs more in line with iOS devices, which use iCloud Drive for all file storage purposes. macOS Sierra is available for free starting today.