First, head onto Highway 752 in the direction of Reykjafoss falls. Continue to drive along, even past Reykjafoss Falls, until you pass two bridges. Once you pass those, slow down – there is a gravel road on the right called Highway 753. Its a little difficult to spot, but it is easily identifiable.
Once you turn onto 753, continue to drive until you reach a fork. Take the right path and drive up until you reach the top of the hill. There's a small lot for parking with a couple of fences nearby. Go through the one on the right.
Keep walking, and then you should encounter a blue sign. This shows you are on the right path – keep walking and you should then see a rock with a sign yellow right next to it. Continue to stay on this path. By this time, you should be able to hear the waterfall. Follow it, and there is a bridge to cross the little stream to stand right by the waterfall.
Over the hill, there are a couple of smaller hot springs. The smaller one is REALLY hot and the bigger one is warm. The bigger one is called the Fosslaug geothermal pool.