How do I clear my iMac and start fresh?

I need to clear my iMac so it's as if it's brand new because I'm selling it to someone else. What steps do I need to take to do so, after I've backed up my files. Is there a one-step way? Do I have to delete everything individually? I'm just concerned mainly about my contacts in my address book, possible passwords that may be saved in hidden places, and other personal items that I may be forgetting about that have been stored over time.

Thanks in advance.

Use the restore disks that came with it, if you've still got them

as andrewmiller25 stated use the restore disks that came with the computer when you bought it.. if you do not have the restore disks for whatever reason you can buy them from ebay or direct from apple.. When I sold my Imac I had to buy the restore disk(s) from apple and the two of them together after shipping was $35.. so if you can find them on ebay that would be the cheap way to go.