Are you transferring the domain and website? or just the domain?
Well, either way, this should cover you:
1. Download all the files you are transferring and zip them up
2. Send that file to the new owner
3. Go to your domain registrar and initiate an ownership change. With GoDaddy, just go to all of your domains, check mark the one you want to push, and click on the "Account Change" icon at the top. Fill in the info and push it.
4. Done.
how about if i need to transfer my directory from www (dot) xyz (dot) com/directory.php to www (dot) xyz (dot) com and keeping all the data/My SQL intact in it ??
If they both use Cpanel, and you have WHM then just use the account move function to move everything over. It will transfer the accounts, files and databases quick and easy.