How to Setup Squid proxy on Ubuntu Server?

In order to install a proxy service on Ubuntu Server edition, please execute the following commands:
Installing Squid:

sudo aptitude -y install squid3

Editing the configuration file:

sudo vim /etc/squid3/squid.conf // add a line in order to enable global access: http_access allow all

Restart the squid to reflect the newly changed configuration settings

initctl restart squid3

As the squid is running now, you can access the proxy by setting the default port as 3128 and using the host ip address.
In order to be able to access squid make sure to open the port 3128 externally for the server you have installed the squid on.