Step 1: $ sudo apt-get install postfix

Postfix configuration screen throws you with the following options to choose from
i) No changes (no changes to configuration settings)
ii) Internet site (Mail sent and received using SMTP)
iii) Internet with smarthost (Mail sent to another machine called smarthost)
iV) Satellite system (All mail sent to another machine for delivery)
v) Local only (No network based mail system. Only applied to this local machine)

For this example let us choose the option (iv) where we have a Linux server connected to external network through another server.

Step 2: sudo dpkg-reconfigure postfix

Next screen will ask you for the “System mail name”. Give the name of the mail server in this location. Go with the default options.

To test if the configuration has gone through successfully I have used two methods. One using telnet and other using sendmail program.

root@server:/# telnet mail-server 25
Trying 192.168.1.11…
Connected to mail-server.domain.com.
Escape character is ‘^]’.
220 mailserver.domain.com Microsoft ESMTP MAIL Service, Version: 6.0.3790.3959 ready at Thu, 6 Aug 2009 12:36:38 -0400
helo gmail.com
250 mail.domain.com Hello [192.168.1.116]
mail from: tester@gmail.com
250 2.1.0 tester@gmail.com….Sender OK
rcpt to:receiver@gmail.com
250 2.1.5 receiver@gmail.com
data
354 Start mail input; end with <CRLF>.<CRLF>
testing email to google output
, yes
.
250 2.6.0 Queued mail for delivery
quit
221 2.0.0 mail.domain.com Service closing transmission channel
Connection closed by foreign host.

For further modification to the configuration you can edit /etc/postfix/main.cf file

~ Sample main.cf configuration ~

#myorigin = /etc/mailname

smtpd_banner = $myhostname ESMTP $mail_name (Ubuntu)
biff = no

# appending .domain is the MUA’s job.
append_dot_mydomain = no

# Uncomment the next line to generate “delayed mail” warnings
#delay_warning_time = 4h

readme_directory = no

# TLS parameters
smtpd_tls_cert_file=/etc/ssl/certs/ssl-cert-snakeoil.pem
smtpd_tls_key_file=/etc/ssl/private/ssl-cert-snakeoil.key
smtpd_use_tls=yes
smtpd_tls_session_cache_database = btree:${data_directory}/smtpd_scache
smtp_tls_session_cache_database = btree:${data_directory}/smtp_scache

# See /usr/share/doc/postfix/TLS_README.gz in the postfix-doc package for
# information on enabling SSL in the smtp client.

myhostname = linuxserver.domain.com
alias_maps = hash:/etc/aliases
alias_database = hash:/etc/aliases
mydestination =
relayhost = mail-server.domain.com
mynetworks = 127.0.0.0/8 192.168.1.0/24
mailbox_size_limit = 0
recipient_delimiter = +
inet_interfaces = loopback-only
inet_protocols = ipv4
myorigin = /etc/mailname

Another way to check if mail is working or not is to use the sendmail program in verbose mode
$ sendmail -v ‘tester@gmail.com’
This is a test email<CRLF>.<CRLF>

Reference:
http://www.rdpslides.com/webresources/FAQ00035.htm
http://pccicla.blogspot.com/2007/02/ubuntu-smtp-server.html