Question as in title. A similar question was asked here, and the only workaround that time was to publish the project into a local Maven repository.
Is this problem fixed (as claimed by some) in Android Studio 0.5.+? In its release note there is a statement that says "Support for source folders outside the module content root". Does that mean we can finally import the library from outside the project folder?
I tried File->Import Project.. but it doesn't work.
EDIT 2: See accepted answer for latest solution (as of 0.8.+)
EDIT:
My project directory structure has only one module main which looks like this
MyApp
    main
        build.gradle
        src
    build.gradle
    settings.gradle
The library project directory has only one module named like lib (they are all auto-generated when creating a new library project)
MyLibrary
    lib
        build.gradle
        src
    build.gradle
    settings.gradle
The following line is added into MyApp/settings.gradle:
include ':main', '..:MyLibrary'
The following is added into MyApp/main/build.gradle:
dependencies {
    compile project(':..:MyLibrary')
}
The result is the following error:
FAILURE: Build failed with an exception.
* What went wrong:
A problem occurred configuring project ':main'.
> Configuration with name 'default' not found.
As a side note, the library project MyLibrary itself can compile without error. The problem seems to be settings.gradle not being able to recognize the library project structure.
 
     
     
     
     
     
     
     
    