to commit to or take decisive action. Derived from similar expressions in automotive contexts.
American English idiom: Bringing a pending act to fruition. Usually connotates an act which will have serious consequences. Also used in reference to quickly increasing speed in a car by manipulating a manual transmission gear shift (the "hammer").
An answer on english.stackexchange.com:
possible that ... "drop the hammer" evolved from "put the hammer down," a trucking term. Robert Chapman & Barbara Kipfer, Dictionary of American Slang, third edition (1995) has this entry for hammer down:
hammer down, adv. phr. (truckers by 1960) Going full speed; with throttle to the floor; =wide open "...a herd of LA rednecks, all of 'em pie-eyed and hammer down"—Esquire
From an answer on Quora:
It's either hitting the gas very hard, or "dropping the clutch" at the beginning of a race.
If drop the hammer = drop the clutch, it means releasing the clutch very quickly to start ("launch") the car quickly from a dead stop