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Unable to add a document to document library using the 'New Document' button

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I have logged in as the site collection administrator. I created a new Document Library. On the ribbon, I clicked on Documents tab, clicked on 'New Document' button and selected the default template. This opens word. I entered some text and clicked on save. This opened the 'Save As' dialog box and it didn't have an option to save it back to the newly created document library. Instead, it gave me options top save it on my drive.

I want to save it to the document library.

The Desktop Experience feature has been installed and WebClient service has been started.



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