A paper wallet is a way to store Bitcoins that involves printing the Bitcoin addresses and private keys directly on a piece of paper. When done properly, paper wallets are one of the safest ways possible to store Bitcoins. bitcoin wiki
In this tutorial we are going to use bitaddress.org and the blockchain.info android app to emphasize the fact your are not dependant on any website. However if you would prefer to use the My Wallet web interface please use this tutorial instead.
Open bitaddress.org and click the Paper Wallet tab. Print the page on high quality setting.
If you already haven't already download the blockchain.info android app. You will need to create a new wallet or pair to an existing wallet, follow the on screen instructions.
Bitcoin Addresses come in two parts - public and private keys. We are going to import the public part of the address into the android app. This lets the app view the balance and transactions of an address but cannot spend the funds without scanning the private part.
Open the android app click the menu button on the top bar and choose "Address Book". Again hit the menu button and select "Scan Watch Only Address" and scan the QR Codes on the paper wallet labeled "Load & Verify". Choose a label for the address if you wish.
You will now see the addresses from the paper wallet in the android app with a (Watch Only) tag. You can receive coins and view your transactions as you would with a regular address.
Please test spending a small amount before receiving any large payments.
Click the send arrow in the top right. Click the menu button and choose "Custom Send"
Set the from address field to the address on the paper wallet.
Enter the recipient and amount to pay. Click Send.
When prompted press ok and scan the qr code labeled "spend" from the new paper wallet.
Assuming no errors your transaction will be sent instantly. Note: Since the private key has now been scanned by a device connected to the internet many people would no longer consider the address true cold storage anymore. Depending on how concerned you are you might wish to use each key only once and send the rest of the coins to a new address each time.