The TERI School of Advanced Studies (TERI SAS) was established as a Trust in 1998 with the aim of providing academic learning programs. Sponsored by TERI, TERI SAS developed educational programs that both supported and were supported by TERI's research on energy, environment, and sustainability. It was envisioned that the academic rigor of the faculty would enhance TERI's applied research quality, while TERI's cutting-edge research would continually refresh TERI SAS’s curriculum, increasing its societal relevance. This synergistic relationship was expected to strengthen both institutions and enhance their contributions to India and the world.

This relationship is formalized in a memorandum of understanding between TERI SAS and TERI, outlining their agreement to share research infrastructure, undertake collaborative research programs, conduct joint studies, and provide mutual support for seminars, symposia, and conferences. The vision for the University was further solidified in 1999 when it was granted "Deemed to be University" status by the University Grants Commission, as notified by the Ministry of Human Resources Development, Department of Education, Government of India, on October 5, 1999.

Since its inception, the Deemed University has offered world-class education and an environment that encourages students to develop fresh perspectives on their studies. This includes regular interactions with researchers, scientists, and academicians. The first convocation of the Deemed University was held on October 16, 2006, where 8 doctoral and 36 master's degrees were awarded. Mr. Nandan Nilekani, CEO and MD of Infosys Technologies, delivered the convocation address, emphasizing sustainable development and the incorporation of related concepts in higher education.

Before relocating to its Vasant Kunj campus, the Deemed University operated from the Darbari Seth Block of the India Habitat Centre from 1998 to 2008. In 2008, TERI SAS moved to its new 'green campus' in Vasant Kunj, a prestigious institutional area in New Delhi. The new campus was designed to enhance learning while showcasing the concept of modern green buildings.

Recognizing the importance of international perspectives in its programs, TERI SAS established memorandums of understanding with several international universities to facilitate the exchange of students, faculty, knowledge, resources, and ideas. In 2007, TERI SAS launched an academic exchange program with Yale University’s School of Forestry and Environmental Studies, supported by the V K Rasmussen Foundation. In 2008, another exchange program was launched with Freie University of Berlin, Germany, supported by DAAD (the German Academic Exchange Service). In 2009, four scholarship programs were established for TERI SAS students, funded by the Sindicatum Climate Change Foundation, HSBC, Deutsche Bank, and Indian Oil Corporation Ltd. In 2013, The Coca-Cola Department of Regional Water Studies was established with generous support from The Coca-Cola Foundation.