Setting Explict Annotation Processor

To fix the error, simply change the configuration of those dependencies to use annotationProcessor. If a dependency includes components that also need to be on the compile classpath, declare that dependency a second time and use the compile dependency configuration.

For example:

annotationProcessor 'com.jakewharton:butterknife:7.0.1'
compile 'com.jakewharton:butterknife:7.0.1'

This link describes it in detail: https://developer.android.com/studio/preview/features/new-android-plugin-migration.html#annotationProcessor_config

Relevant snippet included for completeness.

Use the annotation processor dependency configuration

In previous versions of the Android plugin for Gradle, dependencies on
the compile classpath were automatically added to the processor
classpath. That is, you could add an annotation processor to the
compile classpath and it would work as expected. However, this causes
a significant impact to performance by adding a large number of
unnecessary dependencies to the processor.

When using the new plugin, annotation processors must be added to the
processor classpath using the annotationProcessor dependency
configuration, as shown below:

dependencies {

annotationProcessor ‘com.google.dagger:dagger-compiler:’ }

The plugin assumes a dependency is an annotation processor if its JAR
file contains the following file: META-
INF/services/javax.annotation.processing.Processor. If the plugin
detects annotation processors on the compile classpath, your build
fails and you get an error message that lists each annotation
processor on the compile classpath. To fix the error, simply change
the configuration of those dependencies to use annotationProcessor. If
a dependency includes components that also need to be on the compile
classpath, declare that dependency a second time and use the compile
dependency configuration.

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