1) In the render Tab, under ‘Bake’, select Bake Type: ‘Normal’, enable ‘Selected to Active’, and set Ray Distance large enough to cover the geometry.
2) Make sure the target object has an active UV channel
3) In the UV/Image editor, create a new image with the desired resolution, and name it.
4) In the target Object’s material, set an Image Texture with the new image you created, make sure the Image Texture is node selected in the Node Editor of the Target Object’s material view, so it will be the target for the baked texture.
5) In the render Tab, under ‘Bake’, press the ‘Bake’ button.
6) Set the image texture as the materials Normal Map, check if it’s effective and save it to disk.