Not using Ubuntu, however, my first attempt failed also, and it proved to be a corrupt SSH key, thus was defaulting to a basic password request.
This is what I did. issued,
ssh-keygen -t rsa -b 4096 -C "$root@$22.214.171.124 -$(date -I)"
Replace 'root' with your username, and '126.96.36.199' with the IP address of your created droplet.
The above command will also ask you to provide a key password, and assuming you are using linux as you client, will create the files 'id_rsa' and 'id_rsa.pub' in the .ssh directory of whichever user you are currently logged in as on your local machine.
Now, paste the contents of the generated 'id_rsa.pub' file, for example, as root, that would be,
into the ssh key section on the droplet create page, or ssh key create page.
Once the droplet is created, logging into your droplet with, is simply done by issuing,
You will of course be asked for your key password, if you created one.