How do I set up Android Studio to work completely offline?

Android Studio 0.4.0 now includes support for offline:

http://tools.android.com/recent/androidstudio040released

"You can now open the Compiler > Gradle options and enable Offline mode, which will tell Gradle to ignore update-to-date checks"

Updated Nov 2018: Now you can Open preferences, then search for "offline" and in the results select gradle and click "Offline work"

Android Studio 1.3.1 has neither

Gradle > Global Gradle settings > Offline work

nor a

Compiler

menu. To access the compiler menu, go to :

File > Settings > Build, Execution & Deployment > Compiler > Compiler

and de-select Configure on demand

The above still uses data but is faster, I was able to load images and maps. However, in addition, if you want to be completely offline, you need to do the following:

 File -> Settings ->Build, Execution,Deployment -> Build Tools -> Gradle -> 

check Offline work

Click the OK button.

For Android Studio 2.0 it is the same procedure.

I'm using Android Studio 0.5.4 (Mavericks).

Preferences → Gradle → Global Gradle Settings → Offline work

Android Studio Version < 3.6:

For Windows:

File -> Settings ->Build, Execution,Deployment -> Build Tools -> Gradle

For Mac OS:

Preferences ->Build, Execution,Deployment -> Build Tools -> Gradle

Check/UnCheck Offline work checkbox as per your need.

Android Studio Version >= 3.6:

follow steps in the image: