How can I change where Steam installs games?

When you click on a game to install it on the first window that pops up there will be a drop down menu. On here you have a choice to install on the default directory or to create a new library.

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When you choose to install in a new directory you will get a choice of where to install.

I hope this helps.

You can choose another drive directly in Steam. But than you have to choose this drive at every Download.

To change the default Download folder,

Just quit Steam (important!) and move the entire Steam folder to another location

mv ~/.local/share/Steam /new/path

and start Steam again. It says something like "can't find Steam, did you move it?" and than you can choose the new folder location.

And if you want to make these libraries before installing the game, see my answer to this question Not enough space on hard drive for tf2