I am running AWS lambdas written in java with podman but when I hit the sam command it is throwing "Running AWS SAM projects locally requires Docker. Have you got it installed and running?"

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danitrod On

Apparently SAM uses the DOCKER_HOST environment variable, so that needs to be set. (Source: https://github.com/aws/aws-sam-cli/issues/4329#issuecomment-1289588827)

You can follow these instructions (Windows/MacOS/Linux) to set that variable: https://podman-desktop.io/docs/migrating-from-docker/using-the-docker_host-environment-variable.