Updating to ASP.NET Core 2.0 - Packages are not compatible with netcoreapp2.0

Solved it by updating Visual Studio to it's latest version (for me it was 15.3.3)

Also, make sure SDK is updated to version 2.0 and NuGet to its latest version.

Also, this error can occur with an outdated version of nuget. Specifically, 4.0.0 exhibits this issue. Upgrading to 4.3.0 fixed the problem for me.

VSTS agents seem to use 4.0.0, so to work around this, there is a nuget version installer task which you can run as part of your build step to upgrade the version of nuget running in your build pipeline.