I have downloaded the package available on the project website.
What steps do I have to follow now?
There are plenty of installation guides on the website; I think you should take a look at those.
Besides, it looks like the package is available in the repository, so you can install it with
sudo apt-get install moodle
Take a look at this Step-by-step Installation Guide for Ubuntu. Still, if you insist on installing from source, their own documentation for Installing Moodle may help. Try those and comment/ask for help with any problems you encounter following the instructions.
I would recommend using the moodle
package available in the repository. I have experimented with it and it works successfully.
Follow the instructions
http://docs.moodle.org/26/en/Step-by-step_Installation_Guide_for_Ubuntu
26 is the Version Number, which you have downloaded and wish to Install. In my case, it has worked nicely.