virt-manager can't connect to libvirt

Rebooting the system where virt-manager is installed solved the issue.

After installing KVM, run this command then that error will not occur again.

sudo virt-manager

For me, the error was caused because group membership changes don't apply without a logout-login (or reboot). I had just installed KVM and libvirt-bin. The installer automatically added my user to the libvirtd group, I had restarted the libvirt-bin service, but I was still getting the error.

Don't change file permissions to 777. Don't just run everything as root or sudo to avoid understanding what's wrong.

Simply logging out and back in resolved the problem by applying my new group membership.

Assuming you just installed libvirt-bin and already confirmed that your current user is a member of the libvirtd group as the error message suggests, you will need to log out and back in for the new group membership to apply.

I hope this helps someone.