What are the steps my husband has to do though give up parental rights to his daughter. She doesn't want anything to do with him. She consider her step-father her real Dad. We have talked to her mother about this and she wants him to give up his parental rights.

Does the step-father want to adopt? If not, the courts may not grant it. If he doesn't want to be part of her life then just don't. No need to contact her or the ex and he's out of her life.

If the step does want to adopt, then their lawyer should prepare a relinquishment statement for your husband to sign.