Incompatible plugins for android-apt after upgrading to Android Studio 2.3

The android-apt plugin has been deprecated.
Check here for the migration guide:

As of the Android Gradle plugin version 2.2, all functionality that was previously provided by android-apt is now available in the Android plugin.

You can remove android-apt by following the migration guide to get the equivalent functionalities.

The important parts from the migration guide:

• Make sure you are on the Android Gradle 2.2 plugin or newer.
• Remove the android-apt plugin from your build scripts
• Change all apt, androidTestApt and testApt dependencies to their new format:

dependencies {
   compile 'com.google.dagger:dagger:2.0'
   annotationProcessor 'com.google.dagger:dagger-compiler:2.0'
}

Also in the Android Gradle plugin there is an explicit check for this, which is what you are seeing:

using incompatible plugins for the annotation processing android-apt

Future Android Gradle plugin versions will not be compatible with the way android-apt works, which is the reason for that check.

1. Remove apt plugin

2. Change:

   apt -> compile

   testApt -> testAnnotationProcessor

   androidTestApt -> androidTestAnnotationProcessor

3. In your build.gradle (app), add to defaultConfig:

vectorDrawables.useSupportLibrary = true

For me, I was having this error while using Contentful's Vault library which specifies that you include:

apply plugin: 'com.neenbedankt.android-apt'

and

compile 'com.contentful.vault:core:2.1.0'
apt 'com.contentful.vault:compiler:2.1.0'

What you need to do is DELETE apply plugin: 'com.neenbedankt.android-apt'

and then CHANGE:

compile 'com.contentful.vault:core:2.1.0'
apt 'com.contentful.vault:compiler:2.1.0'

to

annotationProcessor 'com.contentful.vault:compiler:2.1.0'
annotationProcessor 'com.contentful.vault:core:3.0.1'

You can always check https://github.com/contentful/vault for the latest versions

Piggybacking on @Gabriele Mariotti here since his answer is pretty spot on and implies this but doesn't state it. Gradle also does not suggest this as a valid option though it is as well. The testing equivalent for androidTestApt and testApt is androidTestAnnotationProcessor and testAnnotationProcessor.

Example:

testApt "com.google.dagger:dagger-compiler:$daggerVersion"
androidTestApt "com.google.dagger:dagger-compiler:$daggerVersion"

Should be changed to

testAnnotationProcessor "com.google.dagger:dagger-compiler:$daggerVersion"
androidTestAnnotationProcessor "com.google.dagger:dagger-compiler:$daggerVersion"