Best way is described here. No 3rd party software required.
Long story short: Open notepad and paste the following text into it:
============================================================
Windows Registry Editor Version 5.00
[HKEY_LOCAL_MACHINE\SOFTWARE\Policies\Microsoft\Windows\WindowsUpdate]
"DisableOSUpgrade"=dword:00000001
[HKEY_LOCAL_MACHINE\SOFTWARE\Policies\Microsoft\Windows\GWX]
"DisableGWX"=dword:00000001
============================================================
Save the file as "GWX Block.reg"
Run the reg file you just made
Reboot
Done