1. Disable reactivation lock if enabled (Settings > Security > Reactivation Lock).
2. Remove the SIM card and Micro SD card (assuming you're not going to sell them with the phone).
3. Carry out the factory reset: http://www.digitaltrends.com/mobile/how-to-wipe-android-phone-or-tablet/

Important Note: Factory reset works much the same way as formatting a hard drive; with readily available software the data can technically still be recovered. This is an acceptable risk for most users (as the chances of the new buyer attempting to recover your data is probably pretty low) however if you are concerned you can look into tools / methods to "Secure Erase" your Android.