How to set email notification in Nagios?

In yours commands.cfg what is your send notification command ?

I have installed ssmtp: it's a simple tool to configure your smtp account and so be able to send mail from linux command line with /usr/bin/mail command

http://www.linux.com/archive/feature/132006

my config:
cat /etc/ssmtp/ssmtp.conf
#
# Config file for sSMTP sendmail
#
# The person who gets all mail for userids < 1000
# Make this empty to disable rewriting.
root=postmaster

# The place where the mail goes. The actual machine name is required no
# MX records are consulted. Commonly mailhosts are named mail.domain.com

mailhub=<smtpserver-ip-address>:25
AuthUser=<mailaccount>
AuthPass=<mailaccountpassword>
STARTSSL=YES

rewriteDomain=<yourdomain>

# The full hostname
hostname=<hostnameofnagiosserver>

# Are users allowed to set their own From: address?
# YES - Allow the user to specify their own From: address
# NO - Use the system generated From: address


Then configure mail command in command.cfg
# 'notify-host-by-email' command definition
#define command{
#      command_name      notify-host-by-email
#      command_line      /usr/bin/printf "%b" "***** Nagios *****\n\nNotification Type: $NOTIFICATIONTYPE$\nHost: $HOSTNAME$\nState: $HOSTSTATE$\nAddress: $HOSTADDRESS$\nInfo: $HOSTOUTPUT$\n\nDate/Time: $LONGDATETIME$\n\nDate/Time: $LONGDATETIME$\n" | /usr/bin/mail -s "NAGIOS $NOTIFICATIONTYPE$ Host Alert: $HOSTNAME$ is $HOSTSTATE$ **" $CONTACTEMAIL$
#      }

# 'notify-service-by-email' command definition
#define command{
#      command_name      notify-service-by-email
#      command_line      /usr/bin/printf "%b" "***** Nagios *****\n\nNotification Type: $NOTIFICATIONTYPE$\n\nService: $SERVICEDESC$\nHost: $HOSTALIAS$\nAddress: $HOSTADDRESS$\nState: $SERVICESTATE$\n\nAdditional Info:\n$SERVICEOUTPUT$\n\nLong Additional Info:\n$LONGSERVICEOUTPUT$\n\nDate/Time: $LONGDATETIME$\n\nDate/Time: $LONGDATETIME$" | /usr/bin/mail -s "NAGIOS $NOTIFICATIONTYPE$ Service Alert: $HOSTALIAS$/$SERVICEDESC$ is $SERVICESTATE$ **" $CONTACTEMAIL$
#      }

kosarajudeepak comment is exactly how i did it as well. quite simple :)

thanks kosarajudeepak. it is working now.

Now i need to monitor My Firewall and Switches also. please suggest the steps for this.

in /etc/nagios3/commands.cfg
be sure you have defined

define command{
        command_name    notify-host-by-email
......
}

define command{
        command_name    notify-service-by-email
.....
}

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in /etc/nagios3/conf.d/contacts.cfg

define contactgroup{
        contactgroup_name       admins
        alias                   Nagios Administrators
        members                 it
            }

define contact{
    contact_name                    it
    alias                           it
    service_notification_period     24x7
    host_notification_period        hostmonitoringhours
    host_notification_options       d
    service_notification_options    n
    service_notification_commands   notify-service-by-email
    host_notification_commands      notify-host-by-email
    email                           user@domain
host_notifications_enabled              1
service_notifications_enabled           1
}

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in /etc/nagios3/conf.d/generic-host_nagios2.cfg

define host{
        name                            generic-host    ; The name of this host template
        notifications_enabled           0       ; Host notifications are enabled

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in /etc/nagios3/conf.d/generic-host_nagios2.cfg

define service{
        name                            generic-service ; The 'name' of this service template
        notifications_enabled           1       ; Service notifications are enabled

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I'm using postfix with relayhost=[xxx.xxx.xxx.xxx] option, pointed directly to my server. This solution have outgoing queue, so you not loose your notification if connection hang or you can setup mail routing for multiple destiantions.