Sweep the 13x13 area centred on the hatcher, killing all larvae you findfind. Larvae also spawn under other NPCs, so you will need to remove those NPCs.
Tip: Larvae may be hiding under dangerous non-roaming NPCs such as Dreadscorps and some Zs. Get help or plan your APs accordingly.
Once all larvae in the 13x13 are dead, quickly kill the hatcher before a fresh cloud of larvae spawns.