This is now possible by downloading Android Support Repository from the SDK Manager, and replacing
compile files("libs/android-support-v4.jar")
with
compile 'com.android.support:support-v4:13.0.0'
This has to be done for all projects that use the support library. The Android Support Repository is automatically added to your list of repositories by the build system (Unsure of which part adds it, don’t know enough gradle yet).
Source