In Eclipse I used to use a combination (first press Shift + Alt + A, then press S) to extract strings into strings.xml
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Goto Android studio 'Help' -> Find action -> type "extract string resource"
You will find a ON / OFF button. Switch on the option.
Doing the same thing.
Paramasivam Vijay Anand Had it right.
Android Studio 2.2.3 you can go to help and turn on the Extract string resource. However, Alt+enter does not extract the resource when clicking the text in the Design tab, it works for me when I clicked to the Activity_main and then selected the text there. Quotes didn't seem to matter.
You can use Alt + Enter combination.
More info
If you get a menu with ALT + Enter but you do not see the option extract string resource
it might be because you are not in the string but behind the quotation mark.
The cursor has to be inside the quotation marks.