sshd-daemon failed - no such device

Problem

In /var/log/secure following message appears when trying to start sshd:

Nov 22 18:33:21 aridhol sshd[16161]: fatal: daemon() failed: No such device

Solution

The solution is to recreate the /dev/null which is no longer a proper device file:

# rm /dev/null
# mknod /dev/null c 1 3
# chmod 666 /dev/null

This will recreate the /dev/null and sshd should start as normal.