Develop Reference

Error building Android library: Direct local .aar file dependencies are not supported

We recently upgraded to Android Gradle Plugin 4.0.0-beta03. We are now seeing this error when building one of our library modules
$ ./gradlew library_module:assemble
Execution failed for task ':library_module:bundleDebugAar'.
> Direct local .aar file dependencies are not supported when building an AAR.
The resulting AAR would be broken because the classes and Android resources from any local .aar
file dependencies would not be packaged in the resulting AAR. Previous versions of the Android
Gradle Plugin produce broken AARs in this case too (despite not throwing this error). The
following direct local .aar file dependencies of the :library_module project caused this error:
______.aar
I can see this was added to AGP a few months ago. But they provide no further info on why.
So.
What was the problem? Any more info? I can't find a single bug report anywhere.
How exactly can I fix this? Is this saying that I can't build one .aar that depends on other local .aars? What if this local aar was instead hosted on Maven Central or another remote repo? Why would that make a difference?

I recently encountered the same issue, the fix was to remove the library from libs/ and import it using File -> New -> New Module -> Import .JAR/.AAR Package, then referencing it in the library module build.gradle file:
dependencies {
implementation project(":imported_aar_module")
}
If you are on a newer Android Studio version (4.0.0+), this option is not available. Instead you have to do it manually.
Create a new directory and put the following content into the build.gradle file withing the new directory:
configurations.maybeCreate("default")
artifacts.add("default", file('[nameOfTheAar].aar'))
Place the aar into this new directoy. Next to the build.gradle file.
Add the new created Gradle project to the settings.gradle file:
include(":pathToTheCreatedDirectory")
Include the project in your library where you want to use the aar:
implementation project(":pathToTheCreatedDirectory", configuration = "default")

I want to call out #StefMa's comment on this question which was incredible simple and solved this issue for me, but it's buried among many other comments on this thread and is easily missed.
The 'correct' answer on this thread no longer works because it's not possible to import AARs in Android Studio anymore as referred to in that answer. But, the solution referred to in StefMa's comment linking to this GitHub post does, and it works perfectly.
Long story short - put your AAR into a separate module.
There's no need to muck around with creating lib directories, just follow these directions -
Create a new directory in your project's root directory. The image below shows two of them - spotify-app-remote and spotify-auth, but one is sufficient. Within that, put your AAR in, and create a new build.gradle file.
Within the build.gradle file, add the following, replacing the aar filename with the name of your AAR file -
configurations.maybeCreate("default")
artifacts.add("default", file('spotify-app-remote-release-0.7.1.aar'))
Add this to your settings.gradle file, substituting the name of the directory you created
include ':spotify-app-remote'
Include your new module in the module you wish to use the AAR. eg, if you want to use it within your app module, open app's build.gradle and add
api project(':spotify-app-remote')
within your dependencies { } block, obviously again substituting spotify-app-remote with whatever the name of your module is.

When building an Android library that depends on other Android libraries (i.e., aar files), you will get the following error message if you include the aar files as dependencies in the project:
Direct local .aar file dependencies are not supported when building an AAR. The resulting AAR would be broken because the classes and Android resources from any local .aar file dependencies would not be packaged in the resulting AAR. Previous versions of the Android Gradle Plugin produce broken AARs in this case too (despite not throwing this error).
As the above message states, when you build an Android library project, any aar it depends on is not packaged. If you built this way prior to AGP (Android Gradle Plugin) 4, you probably noticed that you had to include the aar dependencies on the project consuming your library.
You can compile your Android library project by specifying that the aar dependencies are compileOnly. See this for more info on when to use compileOnly.
So just add the following to your app build.gradle file:
compileOnly files('libs/some-library.aar')
Note that if you do this you will have to include the aar dependencies on the application project that consumes your library.
Alternatively, you can create a module that imports your aar dependency as #Sandi mentioned in the answer above.
Another way is to publish your aar dependencies to a maven repository and then add them to your library project like this:
implementation 'mylibrarygroup:mylibraryartifact:version-x.y.z#aar'

In my experience, when Gradle Plugin version is 4.2.2+ and Gradle version is 7.1+, as in #Luis's answer 'compileOnly' works.
compileOnly files('libs/your_library_name.aar')
It didn't work when the Gradle versions were lower.

Getting same error when use this code.
implementation fileTree(include: ['*.jar'], dir: 'libs')
implementation fileTree(include: ['*.aar'], dir: 'libs')
Replace your code with following.
Open the top level ‘build.gradle’ file and add.
repositories {
flatDir {
dirs('/src/main/libs')
}
}
Then in your project’s build.gradle add the following.
api(name:'aar_module_name', ext:'aar')

There are some changes now, You need to add your AAR or JAR as a dependency
1.) First, Navigate to File > Project Structure
[Reference Image 1]
2.) Then go to Dependencies > Declared Dependencies tab, click and select JAR/AAR Dependency in the dropdown
[Reference Image 2]
3.)In the Add Jar/Aar Dependency dialog, first enter the path to your .aar or .jar file, then select the configuration to which the dependency applies. If the library should be available to all configurations, select the "implementation" configuration.
[Reference Image 3]
4.) Click OK then Apply > OK.
You are good to go.

I had the same issue, in the sense I wanted to encapsulate a library dependency into a module. However this library dependency had a bunch of aars and creating separate module each of them is just clutter, and can't even find that option in the new studio.
To resolve it I published the aar-s into my local maven, before starting the build process.
So my encapsulating module's build.gradle looked like this:
plugins {
id 'com.android.library'
id 'kotlin-android'
id 'maven-publish'
}
//..
parent.allprojects { // for some reason simply repositories didn't work
repositories {
mavenLocal()
}
}
//...
publishing {
publications {
barOne(MavenPublication) {
groupId 'foo-aar-dependency'
artifactId 'bar1'
version '1.0'
artifact("$libsDirName/bar1.aar")
}
barTwo(MavenPublication) {
groupId 'foo-aar-dependency'
artifactId 'bar2'
version '1.0'
artifact("$libsDirName/bar2.aar")
}
barThree(MavenPublication) {
groupId 'foo-aar-dependency'
artifactId 'bar3'
version '1.0'
artifact("$libsDirName/bar3.aar")
}
// and so on...
}
}
// add the publication before the build even starts
// used ./gradlew mymodule:assemble --dry-run to find where to put it
afterEvaluate {
tasks.clean.dependsOn("publishToMavenLocal")
tasks.preBuild.dependsOn("publishToMavenLocal")
}
dependencies {
implementation "foo-aar-dependency:bar1:1.0"
implementation "foo-aar-dependency:bar2:1.0"
implementation "foo-aar-dependency:bar3:1.0"
// and so on
// also I had to make sure to add the aar's transitive dependencies as implementation below
}
Note: When I sync for the first time the dependencies are not found, but as soon as any clean/assemble is called the dependencies are published prior so it runs as it needs.
Note2: most of this can be moved into a separate file to not clutter your build.gradle
Note3: If you actually want to publish your module as a library this solution is not for you.
Note4: This also works on CI if you run clean then your next task.

For those who prefer to use as a regular dependency (or an item on your Gradle's version catalog):
Create a folder eg. spotifyAppRemote at the same level of app folder
Add the desired .aar file at the root of spotifyAppRemote folder
Create a settings.gradle.kts file at the root of spotifyAppRemote folder. This file will be empty, it just needs to be there for the composite builds. See: docs
Create a build.gradle.kts file at the root of spotifyAppRemote folder:
plugins {
base //allows IDE clean to trigger clean on this module too
}
configurations.maybeCreate("default")
artifacts.add("default", file("spotify-app-remote-release-0.7.2.aar"))
//Change group to whatever you want. Here I'm using the package from the aar that I'm importing from
group = "com.spotify.android"
version = "0.7.2"
Next add Gradle files to this folder to allow this module to build itself. You can do it manually or add the following snippet at the root of settings.gradle.kts (!! the project root, not the empty one created above)
/* Optional - automatically sync gradle files for included build */
rootDir.run {
listOf(
"gradle.properties",
"gradlew.bat",
"gradlew",
"gradle/wrapper/gradle-wrapper.jar",
"gradle/wrapper/gradle-wrapper.properties"
).map { path ->
resolve(path)
.copyTo(
target = rootDir.resolve("spotifyAppRemote").resolve(path),
overwrite = true
)
}
}
Now you can go ahead and add this folder as a module at the settings.gradle.kts on your project root. The same where may add the snippet above:
rootProject.name = "Your project name"
include(":app")
includeBuild("spotifyAppRemote")
Sync and build your project.
Now your included build will be available for your as a regular dependency with the defined group and version. To use this dependency:
dependencies {
// group:moduleName:version
implementation("com.spotify.android:spotifyAppRemote:0.7.2")
}
Thanks other members for the solution.
Source code on github: https://github.com/rsicarelli/SpotifySdkCompositeBuild

If you want to bundle a local .aar within your library and use that library in another project, you could take a look at "fat aars" https://github.com/kezong/fat-aar-android

EDIT : if the AAR does not contain android resources or native code, this could help you.
If you want this local resource directly linked to an "app" or "sdk" module
(no compileOnly)
=> Use a jar.
Rename the .aar to .zip
Extract it
Use the classes.jar inside
That's it.

Patch the problematic 3rd party dependency's build.gradle file. Under their dependencies { } section, they had a line like this:
implementation fileTree(dir: 'libs', include: ['*.jar','*.aar']) //Load all aars and jars from libs folder
My patch changes that line to:
implementation(name: 'the-name-of-the-aar', ext: 'aar')
In my project's build.gradle, under allprojects { repositories { }, added:
flatDir { dirs "$rootDir/../node_modules/the-third-party-dependency/android/src/main/libs" }
Where the AAR file lives
It was tested with reactnative >= 0.69.x

I faced a similar problem:
Task: add .aar SDK inside another SDK
Solution:
We have to create new Android Library Module inside our library (right click on our library name -> module -> Android library )
Delete all files inside it
Insert our .arr inside this module
Create build.gradle file inside module and put there:
configurations.maybeCreate("default")
artifacts.add("default", file('your_arr_name.aar'))
Add to your library build.gradle inside dependencies block next:
implementation project(':your_library:your_arr_module')
Now rebuild project and everything should work fine

It is bug in Android Studio 4.0.+.However, there is a solution.
First, project/build.gradle:
allprojects {
repositories {
google()
jcenter()
mavenCentral()
flatDir {dirs "../MoudleA/aars,../MoudleB/aars,../MoudleC/libs".split(",")
}
}
}
Second, Moudle/build.gradle:
// MoudleA/build.gradle
repositories {
flatDir {
dirs 'aars'
}
}
dependencies {
api fileTree(dir: 'libs', include: ['*.jar'])
//api fileTree(dir: 'aars', include: ['*.aar'])
// aar
new File('MoudleA/aars').traverse(
nameFilter: ~/.*\.aar/
) { file ->
def name = file.getName().replace('.aar', '')
api(name: name, ext: 'aar')
}
}
// MoudleB/build.gradle
repositories {
flatDir {
dirs 'aars'
}
}
dependencies {
api fileTree(dir: 'libs', include: ['*.jar'])
//fullApi fileTree(dir: 'aars/full', include: ['*.aar'])
//liteApi fileTree(dir: 'aars/lite', include: ['*.aar'])
// aar
new File('MoudleB/aars/full').traverse(
nameFilter: ~/.*\.aar/
) { file ->
def name = file.getName().replace('.aar', '')
fullApi(name: 'full/' + name, ext: 'aar')
}
new File('MoudleB/aars/lite').traverse(
nameFilter: ~/.*\.aar/
) { file ->
def name = file.getName().replace('.aar', '')
liteApi(name: 'lite/' + name, ext: 'aar')
}
}
// MoudleC/build.gradle
repositories {
flatDir {
dirs 'libs'
}
}
dependencies {
//api fileTree(dir: 'libs', include: ['*.jar','*.aar'])
api fileTree(dir: 'libs', include: ['*.jar'])
// aar
new File('MoudleC/libs').traverse(
nameFilter: ~/.*\.aar/
) { file ->
def name = file.getName().replace('.aar', '')
api(name: name, ext: 'aar')
}
}
It works for me，You can also try.

You can upload the AARs to an Artifactory, and consume them.

In my case, I realised that I have created libs folder at wrong place then recreated folder in main folder and implementation fileTree(include: ['*.aar'], dir: 'libs') worked.

Adapt aar dependency to maven repo standards and depend on it.
Lets connect the dependency in build.gradle
repositories {
maven { url "$project.projectDir/libs" }
}
dependencies {
api "my-library-group:my-library-module:my-library-version"
}
Replace you libs/myLibrary.arr file with next files:
libs/my-library-group/my-library-module/my-library-version/my-library-module-my-library-version.aar
libs/my-library-group/my-library-module/my-library-version/my-library-module-my-library-version.pom
libs/my-library-group/my-library-module/maven-metadata-local.xml
Where my-library-module-my-library-version.aar is the original aar file
Content of my-library-module-my-library-version.pom
<?xml version="1.0" encoding="UTF-8"?>
<project xsi:schemaLocation="http://maven.apache.org/POM/4.0.0 https://maven.apache.org/xsd/maven-4.0.0.xsd" xmlns="http://maven.apache.org/POM/4.0.0"
xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
<modelVersion>4.0.0</modelVersion>
<groupId>my-library-group</groupId>
<artifactId>my-library-module</artifactId>
<version>my-library-version</version>
<packaging>aar</packaging>
</project>
Content of maven-metadata-local.xml
<?xml version="1.0" encoding="UTF-8"?>
<metadata>
<groupId>my-library-group</groupId>
<artifactId>my-library-module</artifactId>
<versioning>
<latest>my-library-version</latest>
<release>my-library-version</release>
<versions>
<version>my-library-version</version>
</versions>
<lastUpdated>20211130111015</lastUpdated>
</versioning>
</metadata>
Feel free to replace my-library-group, my-library-module, my-library-version with any value you like

Good news for everyone. It seems that we can finally include AARs without subprojects again. I was able to accomplish it using the implementation files directive as follows in the dependencies { } block:
implementation files('ssi.aar')

I also hit this issue when I increase my Android plugin version to 4.0.1, and it turns to error, tried some solutions but none of them are actually doable in our project.
Since we are using product flavours, and different flavours are using different local aar file, we simply can not just using api(name: "xxx", ext: 'aar') since those aar files are located in different flatDir.
For now I have to roll back to previous gradle plugin version.
will edit this answer if I figure something out

Much lazier way to do this in build.gradle.kts files is to use a fileTree combined with flatDir repository.
repositories {
flatDir {
dir("$rootDir/libraries")
}
}
dependencies {
fileTree("$rootDir/libraries").forEach { file ->
implementation(group = "", name = file.name.removeSuffix(".aar"), ext = "aar")
}
}
This way when you add or remove deps to the folder they are automatically configured

for me works this solution:
put into dependences in build.gradle:app file this string:
api fileTree(dir: 'libs', include: ['*.aar'])

Failed to resolve: com.android.support.design:25.4.0

I added the following line to my build.gradle(Module:app):
compile 'com.android.support:design:25.4.0'
But when executing Gradle I'm getting
Failed to resolve: com.android.support.design:25.4.0
I got that the support code from the android support design library and added it to a new project. I added it to the dependency section as such:
dependencies {
compile fileTree(dir: 'libs', include: ['*.jar'])
androidTestCompile('com.android.support.test.espresso:espresso-core:2.2.2', {
exclude group: 'com.android.support', module: 'support-annotations'
})
compile 'com.android.support:appcompat-v7:25.3.1'
compile 'com.android.support.constraint:constraint-layout:1.0.2'
testCompile 'junit:junit:4.12'
compile 'com.android.support:design:25.4.0'
}
Any ideas on what I'm doing wrong?

Important: The support libraries are now available through Google's Maven repository. You do not need to download the support
repository from the SDK Manager. For more information, see Support
Library Setup.
Step 1: Open the build.gradle file for your application.
Step 2: Make sure that the repositories section includes a maven section with the "https://maven.google.com" endpoint. For example:
allprojects {
repositories {
jcenter()
maven {
url "https://maven.google.com"
}
}
}
Step 3: Add the support library to the dependencies section. For example, to add the v4 core-utils library, add the following lines:
dependencies {
...
compile "com.android.support:support-core-utils:25.4.0"
}

A more updated version of the answer of "Bhavesh Patadiya" :
In your project build.gradle file, add google() into the repositories blocks:
repositories {
jcenter()
google()
}
Update the same file with a newer Gradle version:
classpath 'com.android.tools.build:gradle:2.3.3'
If the above cause you new issues or the same issue, exit Android-Studio, and delete the "gradle" folder/s (maybe also ".gradle" folder) and the "build" folder and sub-folders, and then open Android-Studio again.

Mr. Bhavesh Patadiya give us a good solution. However, I'd like to share something more, to make fix process more explicit.
There are two "build.gradle" files under the project directory. Their pathes are to be "Your-project-root-dir/build.gradle" and "Your-project-root-dir/app/build.gradle" respectively. When you see the error information in your android studio, and try to trace the file, you will probably open the second one.
You should add this statement in the first file ("Your-project-root-dir/build.gradle").
allprojects {
repositories {
jcenter()
maven {
url "https://maven.google.com"
}
}
}
and add the statements in the second build.gradle ("Your-project-root-dir/app/build.gradle")
dependencies {
...
compile "com.android.support:support-core-utils:27.0.2"
}

Always keep appcompact version and support lib versionssame, so change com.android.support:design:25.4.0 to com.android.support:design:25.3.1

allprojects {
repositories {
google()
jcenter()
mavenCentral()
}
}

You need to update the android support Repository in the SDK manager . Also the Design Library depends on the Support v4 and AppCompat Support Libraries.
Same version android support must be the same with others..
compile 'com.android.support:appcompat-v7:25.3.1' <-- same
compile 'com.android.support:design:23.3.1' <-- same

after adding :
maven {
url "https://maven.google.com"
}
make sure your Gradle sync is on ONLINE mode
you can check it from:
Android studio -> Preferences -> Build, Execution, Deployment ->
Gradle -> Offline work (make sure this check box is not selected)

This problem occurs when there is andoridtestImplementation is added in app.build.
Remove testImplementation,androidTestImplementation from the app.build, that solves this issue.

Above answers did't resolve anything for me.
Tried syncing the project- Failed.
Tried building the project -Failed
Problem found :
Sdk Support Repository was corrupted
.
Fix:
Go to the SDK manager, click the "SDK Tools" tab. If the check-mark
for "Support Repository" is selected, unselect it and click OK. This
will delete all of the files in the repository. Then recheck the
check-mark, click GO and reinstall the repository.

If you still have the issue, check the project settings for offline mode. if offline mode is on, then off and sync the project. That fixed my issue.

There is no library by that name. There is com.android.support:recyclerview-v7:25.4.0.
Failed to resolve com.android.support:support-compat:25.4.0
Failed to resolve com.android.support:support-core-ui:25.4.0
I am trying to include this library to my project by adding
compile 'jp.wasabeef:recyclerview-animators:2.2.7'
so remove this line from gradle
my error just resolved

Android studio gradle error, "configuration with name default not found" with aviary sdk

First of all, I know there are a lot of subjects about this problems, but I still can't fix it.
I'm just trying to customize aviary sdk by following the guide here : https://developers.aviary.com/docs/android/setup-guide# (section 4.2, not 4.1)
here are my root gradle files :
build.gradle
buildscript {
repositories {
jcenter()
}
dependencies {
classpath 'com.android.tools.build:gradle:2.1.2'
// NOTE: Do not place your application dependencies here; they belong
// in the individual module build.gradle files
}
}
allprojects {
repositories {
jcenter()
}
}
task clean(type: Delete) {
delete rootProject.buildDir
}
settings.gradle :
include ':app', ':Aviary-Android-Sample-App'
here is my app build.gradle file :
apply plugin: 'com.android.application'
android {
compileSdkVersion 20
buildToolsVersion "20.0.0"
defaultConfig {
applicationId "com.example.agaze.myapplication"
minSdkVersion 10
targetSdkVersion 20
versionCode 1
versionName "1.0"
}
buildTypes {
release {
minifyEnabled false
proguardFiles getDefaultProguardFile('proguard-android.txt'), 'proguard-rules.pro'
}
}
}
dependencies {
compile fileTree(include: ['*.jar'], dir: 'libs')
testCompile 'junit:junit:4.12'
compile 'com.android.support:appcompat-v7:20.0.0'
compile project(':Aviary-Android-Sample-App')
}
Here my files tree:
Thanks in advance for your tips.
Antonin

Check your submodules and make sure each submodule in your project has its own build.gradle file.
Check this guide for more info
tools.android.com/tech-docs/new-build-system/user-guide

Each library you add to your project should have it's own build.gradle file. If it does not have you can get this error.
For a solution you can add your sdk as a module with Android Studio. To do this you can follow the path in Android Studio:
File > New > Import Module and select directory of your sdk and add to your project.
Select Gradle System and let Android Studio create gradle files for your sdk.
You can check the link below for more information and how to add a module to your project.
http://www.truiton.com/2015/02/android-studio-add-library-project/
I hope this'll help you.

From your screen shot.It's obvious that the Aviary-Android-Sample-App is an eclipse project(no gradle file there) but not a valid gradle module.
If you want to import it into android studio, in android studio, click File -> new module -import eclipse adt project and go on under the instruction.
And you are good to go.
Edit:
Also, it seems that you want to modified the Aviary sdk, but the module you want to import is a sample app. Maybe you have downloaded the wrong file. The correct link looks like this one https://creativesdk.adobe.com/downloads.html

Why does it give me a "Failed to resolve" error in Android Studio?

I am trying to learn Android and I tried to make an example from a tutorial. I have to include two libraries in the build.gradle, but when I sync the project with the gradle files it gives me this error: "Failed to resolve".
Here is the dependecies part from build.gradle:
dependencies {
compile fileTree(dir: 'libs', include: ['*.jar'])
compile 'com.android.support:appcompat-v7:22.1.1'
compile 'com.loopj.android:android-async-http:1.4.4'
compile 'com.squareup.picasso:picasso:2.1.1'
}
Is there somethig wrong with the versions of the libraries or is it something else?

In your build.gradle you have to add:
repositories {
jcenter()
}
Gradle has to know where to download the aar files.
Pay attention to your example. You are using picasso:2.1.1.
It is a very old version.
Here you can find all releases of this library.

So it unable to resolve the jar! So I believe you missing jcenter() in your build.gradle. Your build.gradle should look like this
repositories {
jcenter()
}
And your'e using older version of picasso library, the new version is 2.5.2
Still if face the problem you can download the JAR and add to libs folder.
You can find jar from this link

1.download the jar file of picasso from this site square.github.io/picasso/
2.add the jar file to your app/lib folder
3.from android studio go to file/project structure/dependency then click on the blue + button then jar dependency from the lib folder select picasso at last press ok

in my case adding mavencentral to gradle worked
I took it from here
Could not find com.squareup.picasso:picasso:2.5.2
enter repositories {
jcenter()
mavenCentral()
}

Adding local .aar files to Gradle build using "flatDirs" is not working

I'm aware of this question: Adding local .aar files to my gradle build but the solution does not work for me.
I tried adding this statement to the top level of my build.gradle file:
repositories {
mavenCentral()
flatDir {
dirs 'libs'
}
}
I've also put the slidingmenu.aar file into /libs and referenced it in the dependencies section: compile 'com.slidingmenu.lib:slidingmenu:1.0.0#aar' but it did not work at all.
I tried compile files('libs/slidingmenu.aar') as well but with no luck.
What am I missing? Any ideas?
P.S. Android Studio 0.8.2

Building upon Josiah's answer, here's how I got it to work.
Following his instructions (under edit) (File -> New-> New Module -> Import .JAR/.AAR) and import your .AAR.
Then in your project build.gradle (not the top level one, the one under 'app') add the following (in the dependencies section):
dependencies {
compile project(':Name-Of-Your-Project')
}
Note Name-Of-Your-Project should match the name of the folder that was added after you imported the AAR file (at the same level as app/.idea under the top most level folder). Or to put it another way...
MyApplication
.idea
app
build.gradle (here's where to add compile project(':ProjectName') to dependency section)
ProjectName (added automatically after importing, matching the name of your aar file)
build
gradle
etc
This worked for me running Android Studio 0.8.0. Don't forget to synchronize gradle (using toolbar button or in File->Synchronize) after you do this.
(Thanks to Josiah for getting me going in the right direction)
(Note: prior to this I tried adding it to the libs folder, trying to manipulate the top level build.gradle and the app level build.gradle, but none of that worked for my aars files--jar's will work fine, but not the aar files)

Update : As #amram99 mentioned, the issue has been fixed as of the release of Android Studio v1.3.
Tested and verified with below specifications
Android Studio v1.3
gradle plugin v1.2.3
Gradle v2.4
What works now
Now you can import a local aar file via the File>New>New
Module>Import .JAR/.AAR Package option in Android Studio v1.3
However the below answer holds true and effective irrespective of the Android Studio changes as this is based of gradle scripting.
Old Answer :
In a recent update the people at android broke the inclusion of local aar files via the Android Studio's add new module menu option.
Check the Issue listed here.
Irrespective of anything that goes in and out of IDE's feature list , the below method works when it comes to working with local aar files.(Tested it today):
Put the .aar file in the libs directory (create it if needed), then, add the following code:
In the module build.gradle:
dependencies {
compile(name:'nameOfYourAARFileWithoutExtension', ext:'aar')
}
In the project build.gradle:
repositories{
flatDir{
dirs 'libs'
}
}

Edit:
The correct way (currently) to use a local AAR file as a build dependency is to use the module import wizard (File | New Module | Import .JAR or .AAR package) which will automatically add the .aar as a library module in your project.
Old Answer
Try this:
allprojects {
repositories {
jcenter()
flatDir {
dirs 'libs'
}
}
}
...
compile(name:'slidingmenu', ext:'aar')

I got this working on Android Studio 2.1. I have a module called "Native_Ads" which is shared across multiple projects.
First, I created a directory in my Native_ads module with the name 'aars' and then put the aar file in there.
Directory structure:
libs/
aars/ <-- newly created
src/
build.gradle
etc
Then, the other changes:
Top level Gradle file:
allprojects {
repositories {
jcenter()
// For module with aar file in it
flatDir {
dirs project(':Native_Ads').file('aars')
}
}
}
App module's build.gradle file:
- no changes
Settings.gradle file (to include the module):
include ':app'
include 'Native_Ads'
project(':Native_Ads').projectDir = new File(rootProject.projectDir, '../path/to/Native_Ads')
Gradle file for the Native_Ads module:
repositories {
jcenter()
flatDir {
dirs 'aars'
}
}
dependencies {
compile(name:'aar_file_name_without_aar_extension', ext:'aar')
}
That's it. Clean and build.

This solution is working with Android Studio 4.0.1.
Apart from creating a new module as suggested in above solution, you can try this solution.
If you have multiple modules in your application and want to add aar to just one of the module then this solution come handy.
In your root project build.gradle
add
repositories {
flatDir {
dirs 'libs'
}}
Then in the module where you want to add the .aar file locally. simply add below lines of code.
dependencies {
api fileTree(include: ['*.aar'], dir: 'libs')
implementation files('libs/<yourAarName>.aar')
}
Happy Coding :)

The easiest way now is to add it as a module
This will create a new module containing the aar file, so you just need to include that module as a dependency afterwards

This is my structure, and how I solve this:
MyProject/app/libs/mylib-1.0.0.aar
MyProject/app/myModulesFolder/myLibXYZ
On build.gradle
from Project/app/myModulesFolder/myLibXYZ
I have put this:
repositories {
flatDir {
dirs 'libs', '../../libs'
}
}
compile (name: 'mylib-1.0.0', ext: 'aar')
Done and working fine, my submodule XYZ depends on somelibrary from main module.

You can do it this way. It needs to go in the maven format:
repositories {
maven { url uri('folderName')}
}
And then your AAR needs to go in a folder structure for a group id "com.example":
folderName/
com/
example/
verion/
myaar-version.aar
Then reference as a dependency:
compile 'com.example:myaar:version#aar'
Where version is the version of your aar file (ie, 3.0, etc)

In my case, I just put the AAR file in libs, and add
dependencies {
...
api fileTree(dir: 'libs', include: ['*.aar'])
...
}
in build.gradle and it works. I think it is similar with default generated dependency:
implementation fileTree(dir: 'libs', include: ['*.jar'])

In my case the none of the answers above worked! since I had different productFlavors just adding
repositories {
flatDir {
dirs 'libs'
}
}
did not work! I ended up with specifying exact location of libs directory:
repositories{
flatDir{
dirs 'src/main/libs'
}
}
Guess one should introduce flatDirs like this when there's different productFlavors in build.gradle

For anyone who has this problem as of Android Studio 1.4, I got it to work by creating a module within the project that contains 2 things.
build.gradle with the following contents:
configurations.create("default")
artifacts.add("default", file('facebook-android-sdk-4.7.0.aar'))
the aar file (in this example 'facebook-android-sdk-4.7.0.aar')
Then include the new library as a module dependency. Now you can use a built aar without including the sources within the project.
Credit to Facebook for this hack. I found the solution while integrating the Android SDK into a project.

If you already use Kotlin Gradle DSL, the alternative to using it this way:
Here's my project structure
|-root
|----- app
|--------- libs // I choose to store the aar here
|-------------- my-libs-01.aar
|-------------- my-libs-02.jar
|--------- build.gradle.kts // app module gradle
|----- common-libs // another aar folder/directory
|----------------- common-libs-01.aar
|----------------- common-libs-02.jar
|----- build.gradle.kts // root gradle
My app/build.gradle.kts
Using simple approach with fileTree
// android related config above omitted...
dependencies {
// you can do this to include everything in the both directory
// Inside ./root/common-libs & ./root/app/libs
implementation(fileTree(mapOf("dir" to "libs", "include" to listOf("*.jar", "*.aar"))))
implementation(fileTree(mapOf("dir" to "../common-libs", "include" to listOf("*.jar", "*.aar"))))
}
Using same approach like fetching from local / remote maven repository with flatDirs
// android related config above omitted...
repositories {
flatDir {
dirs = mutableSetOf(File("libs"), File("../common-libs")
}
}
dependencies {
implementation(group = "", name = "my-libs-01", ext = "aar")
implementation(group = "", name = "my-libs-02", ext = "jar")
implementation(group = "", name = "common-libs-01", ext = "aar")
implementation(group = "", name = "common-libs-02", ext = "jar")
}
The group was needed, due to its mandatory (not optional/has default value) in kotlin implementation, see below:
// Filename: ReleaseImplementationConfigurationAccessors.kt
package org.gradle.kotlin.dsl
fun DependencyHandler.`releaseImplementation`(
group: String,
name: String,
version: String? = null,
configuration: String? = null,
classifier: String? = null,
ext: String? = null,
dependencyConfiguration: Action<ExternalModuleDependency>? = null
)
Disclaimer:
The difference using no.1 & flatDirs no.2 approach, I still don't know much, you might want to edit/comment to this answer.
References:
https://stackoverflow.com/a/56828958/3763032
https://github.com/gradle/gradle/issues/9272

This line includes all aar and jar files from libs folder:
implementation fileTree(include: ['*.jar', '*.aar'], dir: 'libs/')

Add below in app gradle file
implementation project(path: ':project name')