[SOLVED] How do I add a library project to Android Studio?

Update for Android Studio 1.0

Since Android Studio 1.0 was released (and a lot of versions between v1.0 and one of the firsts from the time of my previous answer) some things has changed.

My description is focused on adding external library project by hand via Gradle files (for better understanding the process). If you want to add a library via Android Studio creator just check the answer below with visual guide (there are some differences between Android Studio 1.0 and those from screenshots, but the process is very similar).

Before you start adding a library to your project by hand, consider adding the external dependency. It won’t mess in your project structure. Almost every well-known Android library is available in a Maven repository and its installation takes only one line of code in the app/build.gradle file:

dependencies {
     implementation 'com.jakewharton:butterknife:6.0.0'
}

Adding the library

Here is the full process of adding external Android library to our project:

Create a new project via Android Studio creator. I named it HelloWorld.
Here is the original project structure created by Android Studio:

HelloWorld/
      app/
           - build.gradle  // local Gradle configuration (for app only)
           ...
      - build.gradle // Global Gradle configuration (for whole project)
      - settings.gradle
      - gradle.properties
      ...

In the root directory (HelloWorld/), create new folder: /libs in which we’ll place our external libraries (this step is not required - only for keeping a cleaner project structure).
Paste your library in the newly created /libs folder. In this example I used PagerSlidingTabStrip library (just download ZIP from GitHub, rename library directory to „PagerSlidingTabStrip" and copy it). Here is the new structure of our project:

HelloWorld/
      app/
           - build.gradle  // Local Gradle configuration (for app only)
           ...
      libs/
           PagerSlidingTabStrip/
                - build.gradle // Local Gradle configuration (for library only)
      - build.gradle // Global Gradle configuration (for whole project)
      - settings.gradle
      - gradle.properties
      ...

Edit settings.gradle by adding your library to include. If you use a custom path like I did, you have also to define the project directory for our library. A whole settings.gradle should look like below:
```
 include ':app', ':PagerSlidingTabStrip'
 project(':PagerSlidingTabStrip').projectDir = new File('libs/PagerSlidingTabStrip')
```

5.1 If you face "Default Configuration" error, then try this instead of step 5,

    include ':app'
    include ':libs:PagerSlidingTabStrip'

In app/build.gradle add our library project as an dependency:

 dependencies {
     implementation fileTree(dir: 'libs', include: ['*.jar'])
     implementation 'com.android.support:appcompat-v7:21.0.3'
     implementation project(":PagerSlidingTabStrip")
 }

6.1. If you followed step 5.1, then follow this instead of 6,

    dependencies {
        implementation fileTree(dir: 'libs', include: ['*.jar'])
        implementation 'com.android.support:appcompat-v7:21.0.3'

        implementation project(":libs:PagerSlidingTabStrip")
    }

If your library project doesn’t have build.gradle file you have to create it manually. Here is example of that file:

     apply plugin: 'com.android.library'

     dependencies {
         implementation 'com.android.support:support-v4:21.0.3'
     }

     android {
         compileSdkVersion 21
         buildToolsVersion "21.1.2"

         defaultConfig {
             minSdkVersion 14
             targetSdkVersion 21
         }

         sourceSets {
             main {
                 manifest.srcFile 'AndroidManifest.xml'
                 java.srcDirs = ['src']
                 res.srcDirs = ['res']
             }
         }
     }

Additionally you can create a global configuration for your project which will contain SDK versions and build tools version for every module to keep consistency. Just edit gradle.properties file and add lines:

 ANDROID_BUILD_MIN_SDK_VERSION=14
 ANDROID_BUILD_TARGET_SDK_VERSION=21
 ANDROID_BUILD_TOOLS_VERSION=21.1.3
 ANDROID_BUILD_SDK_VERSION=21

Now you can use it in your build.gradle files (in app and libraries modules) like below:

 //...
 android {
     compileSdkVersion Integer.parseInt(project.ANDROID_BUILD_SDK_VERSION)
     buildToolsVersion project.ANDROID_BUILD_TOOLS_VERSION

     defaultConfig {
         minSdkVersion Integer.parseInt(project.ANDROID_BUILD_MIN_SDK_VERSION)
         targetSdkVersion Integer.parseInt(project.ANDROID_BUILD_TARGET_SDK_VERSION)
     }
 }
 //...

That’s all. Just click‚ synchronise the project with the Gradle’ icon . Your library should be available in your project.

Google I/O 2013 - The New Android SDK Build System is a great presentation about building Android apps with Gradle Build System: As Xavier Ducrohet said:

Android Studio is all about editing, and debugging and profiling. It's not about building any more.

At the beginning it may be little bit confusing (especially for those, who works with Eclipse and have never seen the ant - like me ;) ), but at the end Gradle gives us some great opportunities and it worth to learn this build system.