After downloading postgressql driver jar file. just move the postgressql driver jar file into Jboss 7 installation directory under setandalone/deployments (jboss-as-web-7.0.0.Final/standalone/deployments).

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Note that you may instead deploy the PostgreSQL JDBC driver as a module. That's the only way you'll be able to use a -ds.xml file to define a datasource, as far as I can tell anyway. Create the directory modules/org/postgresql/main and place postgresql-9.1-901-1.jdbc4.jar within it. Now create a module.xml file in the same place, with the content:

Activate it as "postgresql-driver" with

 
    jboss-cli.sh --connect command="/subsystem=datasources/jdbc-driver=postgresql-driver:add(driver-name=postgresql-driver, driver-class-name=org.postgresql.Driver, driver-module-name=org.postgresql"
You may nown use this driver in -ds.xml files by specifying it as "postgresql-driver", eg:

Unlike explicitly naming the jdbc jar in a data-source create command, you can now update PgJDBC without changing all your datasources. You can put the -ds.xml file in your WEB-INF/ (for war archives) or META-INF (for jar archives) to have it defined as part of the deployment automatically by the server, or you can deploy it via jboss-cli or the deployments/ folder to define it separately from your app. It serves the same function as running a jboss-cli "data-source add" command, but can also be bundled in-archive and is easier to version.

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