Polygonal tundra and ice-rich permafrost landscapes are widespread across the Arctic and prone to rapid transitions due to ground subsidence, thermokarst or thermoerosion. Such small-scale processes are typically not resolved in large-scale Earth System models. Our goal with this study was to develop a scalable modeling approach that is capable of simulating the degradation of ice-wedges and the corresponding geomorphological transition from low- to high-centered polygons. For this, we employed the land surface model CryoGrid3 and advanced it by a hydrological infiltration scheme. We simulated the lateral exchange of heat, water, and snow between polygon centers, rims and troughs by coupling multiple realizations. We proved our modeling approach to be capable of describing the evolution of ice-wedge polygons and analyzed the hydrological and climatic conditions, which are favorable for their degradation. With this, we contributed to the understanding of landscape transitions in ice-rich permafrost regions and their representation in large-scale models.