How to Enable Password-based Login for Amazon EC2 / Google Compute Engine

Although ssh key-based login is preferred to password-based login, sometimes clients still need password-based login. Amazon EC2 / Google Compute Engine disable password-based login by default. To enable it,

# vi /etc/ssh/sshd_config

Find the line
PasswordAuthentication no
and change it to
PasswordAuthentication yes

Save the file and restart sshd:
# /etc/init.d/sshd restart
Caution: whenever making changes to your sshd.config file, be certain that you have an active shell session in case you've made a fatal syntax error. After restarting sshd, log in from another session to test it before terminating your active terminal session.

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