Using Visual Studio 2013 (update 4) with TFS Azure (as a service).

Two steps are required:

1. NuGet client has a bug (more info here) and adds packages to TFS Pending changes list. Stop this by adding \.nuget\nuget.config under solution folder (see download below).

2. TFS client automatically detects changes in the file system. Use \.tfignore (in solution folder) file for stopping TFS client detecting changes under packages folder.

Download

Downlod zip-file including the files required – namely nuget.config and .tfignore. Unpack it into the solution folder.

Restart VS

Restart Visual Studio after unpacking the files.
It is likely that you have to UNDO the current Pending changes for packages folder (first time only).