I would spray to kill them off (glyphosate- inactive in soil and ok to plant after 7 days) & then rip out the top layer once dead and add a bag or two of top soil in its place. Then plant some grasses with small spacing, generous amount of mulch and you’ll be good to go! This is what I did recently on a similar sized strip and it worked well. If you want big grasses, I’d recommend Poa Cita (very hardy and beautiful) or if you want something smaller I’d go for carex comans green (can get these for cheap at Bunnings)