diff --git a/target/imagebuilder/Config.in b/target/imagebuilder/Config.in
index 6756c14c16..9d48e037e8 100644
--- a/target/imagebuilder/Config.in
+++ b/target/imagebuilder/Config.in
@@ -7,4 +7,10 @@ config IB
 	  with precompiled packages, kernel image and image building tools.
 	  You can use it to generate custom images without compiling anything
 
-
+config IB_STANDALONE
+	bool "Include package repositories"
+	depends on IB
+	help
+	  By default, the ImageBuilder will use the online package repositories
+	  to fetch additional .ipk archives. Enabling this option will cause
+	  the ImageBuilder to embed all built packages locally instead.
diff --git a/target/imagebuilder/Makefile b/target/imagebuilder/Makefile
index 1f97cb8613..218def7e1d 100644
--- a/target/imagebuilder/Makefile
+++ b/target/imagebuilder/Makefile
@@ -9,6 +9,7 @@ include $(TOPDIR)/rules.mk
 include $(INCLUDE_DIR)/kernel.mk
 include $(INCLUDE_DIR)/host.mk
 include $(INCLUDE_DIR)/version.mk
+include $(INCLUDE_DIR)/feeds.mk
 
 override MAKEFLAGS=
 
@@ -33,8 +34,38 @@ $(BIN_DIR)/$(IB_NAME).tar.bz2: clean
 		$(TMP_DIR)/.targetinfo \
 		$(TMP_DIR)/.packageinfo \
 		$(PKG_BUILD_DIR)/
+
+ifeq ($(CONFIG_IB_STANDALONE),)
+	echo '## Remote package repositories' >> $(PKG_BUILD_DIR)/repositories.conf
+  ifeq ($(CONFIG_PER_FEED_REPO),)
+	echo "src/gz %n %U" >> $(PKG_BUILD_DIR)/repositories.conf
+  else
+	for d in base $(FEEDS_ENABLED); do \
+		echo "src/gz %n_$$d %U/$$d" >> $(PKG_BUILD_DIR)/repositories.conf; \
+	done
+    ifneq ($(CONFIG_PER_FEED_REPO_ADD_DISABLED),)
+	for d in $(FEEDS_DISABLED); do \
+		echo "$(if $(CONFIG_PER_FEED_REPO_ADD_COMMENTED),# )src/gz %n_$$d %U/$$d" >> $(PKG_BUILD_DIR)/repositories.conf; \
+	done
+    endif
+  endif
+endif
+
+	echo '## This is the local package repository, do not remove!' >> $(PKG_BUILD_DIR)/repositories.conf
+	echo 'src imagebuilder file:packages'                          >> $(PKG_BUILD_DIR)/repositories.conf
+
 	$(VERSION_SED) $(PKG_BUILD_DIR)/repositories.conf
+
+ifeq ($(CONFIG_IB_STANDALONE),)
+	(cd $(PACKAGE_DIR); $(FIND) -type f -name 'libc_*.ipk' -or -name 'kernel_*.ipk' -or -name 'kmod-*.ipk') | \
+		while read path; do \
+			mkdir -p "$(PKG_BUILD_DIR)/packages/$${path%/*}"; \
+			cp "$(PACKAGE_DIR)/$$path" "$(PKG_BUILD_DIR)/packages/$$path"; \
+		done
+else
 	$(CP) $(PACKAGE_DIR) $(PKG_BUILD_DIR)/packages
+endif
+
 	$(CP) $(TOPDIR)/target/linux $(PKG_BUILD_DIR)/target/
 	if [ -d $(TOPDIR)/staging_dir/host/lib/grub ]; then \
 		$(CP) $(TOPDIR)/staging_dir/host/lib/grub/ $(PKG_BUILD_DIR)/staging_dir/host/lib; \
diff --git a/target/imagebuilder/files/Makefile b/target/imagebuilder/files/Makefile
index f3bfec1e31..0f0fe42b59 100644
--- a/target/imagebuilder/files/Makefile
+++ b/target/imagebuilder/files/Makefile
@@ -107,7 +107,7 @@ _call_image:
 		$(MAKE) package_index; \
 	else \
 		mkdir -p $(TARGET_DIR)/tmp; \
-		$(OPKG) update; \
+		$(OPKG) update || true; \
 	fi
 	$(MAKE) package_install
 ifneq ($(USER_FILES),)
@@ -123,7 +123,7 @@ package_index: FORCE
 	(cd $(PACKAGE_DIR); $(SCRIPT_DIR)/ipkg-make-index.sh . > Packages && \
 		gzip -9c Packages > Packages.gz \
 	) >/dev/null 2>/dev/null
-	$(OPKG) update
+	$(OPKG) update || true
 
 package_install: FORCE
 	@echo
diff --git a/target/imagebuilder/files/repositories.conf b/target/imagebuilder/files/repositories.conf
index 708855eb8c..8f1f27fe50 100644
--- a/target/imagebuilder/files/repositories.conf
+++ b/target/imagebuilder/files/repositories.conf
@@ -2,5 +2,3 @@
 # src/gz %n %U
 # src custom file:///usr/src/openwrt/bin/%T/packages
 
-## This is the local package repository, do not remove!
-src imagebuilder file:packages