How do I update version of Fish Terminal? (Ubuntu)

Add the PPA for release-3, update, and install

sudo add-apt-repository ppa:fish-shell/release-3
sudo apt-get update
sudo apt-get install fish

The best way is to use the package archive provided by the fish project to replace the packages that the Ubuntu project ship (which are very old and contain security problems).

The following commands subscribe your system to the Personal Package Archive run by the fish developers, update the package list and finally upgrade or install fish:

sudo add-apt-repository ppa:fish-shell/release-3
sudo apt-get update
sudo apt-get install fish

As an added bonus, running apt-get upgrade after these steps will always make sure you have the newest-available version of fish.