Check to see if the school has instructions in its offer package on how to inform it of your decision. There may be a response form included that you'll need to mail in. Other schools may ask you to update your status on an online student-information system.
Write a brief, positive letter to the university admissions committee if there is no status form included or any way to update your status online. You should begin the letter with your name and address and the date, followed by the name and address of the university officials; "Admissions Committee" at "X University" will suffice.
Thank the admissions committee for its letter of acceptance. Be sure to include the date of the original letter.
Decline the offer in a respectful manner, and explain where you'll be attending college instead. For example, you could say, "I appreciate the invitation to attend X University, but I have decided to accept an offer at Y University."
Thank the admissions committee again for its time and consideration. Sign your name at the bottom of the letter.