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My user from another server gave his public key to me and asked me to install this public key into my server so he can connect to my server. Did some research and I have to create a directory called .ssh and paste my user public key in a Notepad and save this text file into the .ssh directory. My question is does my research correct if so where and how I create this .ssh directory and the key file, is it in text file format? Do I have to pass any information like my key to the user? I’m using Windows Server 2012.

• The public key must go into authorized_keys file (not just to some text file) in the .ssh subfolder of user's home directory.


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  The public key entry must have a correct format like:

  
  
  

  ssh-rsa AAAAB3NzaC1yc2EAAAABJQAAAIEAir2cIHsAFg8QzLF6Yb... some optional comment
  

  
  



• The authorized_keys file must use *nix line endings, what Notepad cannot do (so make sure your SFTP/FTP client uses ASCII transfer mode to convert the line endings)



• The .ssh folder needs to have 700 permissions and the authorized_keys needs to have 600 permissions.

There are zillions of guides on the Internet that cover the above.

For example see my guide to Setting up SSH public key authentication in OpenSSH.

If the user is already a user on your server (has password [or other] authentication working), he/she can setup the public key on his/her own.

• On *nix machines (or others that have OpenSSH available, what may include Windows), you can use ssh-copy-id script.


• On Windows machines, you can use (my) WinSCP, with its Install Public Key into Server function.

See also my answer to Setting up public key authentication to Linux server from Windows (ppk private key).

You should provide your user a copy of the server's public host key, so that the user can verify it, when connecting for the first time (it's a separate from the authentication, what the rest of the question is about). Though many users just blindly accept the host key.