Not sure if you have Classic or New Outlook? Click here to find out.
Open Outlook and click the settings gear in the upper right:
Click on Automatic Replies. Toggle on Automatic Replies
Now you can specify a time period if you wish. Additionally you can set one message for internal users and a different one for external. You can also set it just for one or the other.
If sending a reply to external users you can choose to only send the message to those in your contacts or to everyone.
NOTE: What you put here is exactly what they will get. If you want your signature in your Out of Office Message you'll need to copy and paste that in below your message. The easiest way to do this is to just start a new message and copy it from there.
Once you have your message set Click OK.