13th December 2016
Update (14th December): Android Grade plugin 2.3.0-alpha3 has now been pushed to jcenter.
Android Studio 2.3 Canary 3 has begun rolling out, but it can break command line builds (including those used on your CI).
Users of Android Studio 2.3-* who are still using stable versions of the Android Gradle plgin (i.e. 2.2.*) can stop reading now, the issue only affect those using the bleeding edge version of the plugin: 2.3.0-alpha*.
The problem is caused by Android Studio refusing to work with earlier alpha releases of the plugin and demanding that you update to the latest 2.3.0-alpha3 which is bundled with Android Studio 2.3 Canary 3. However unlike the previous alphas, the 2.3.0-alpha3 Android Gradle has not been pushed to jcenter. The result of this is that if you build from the command line, gradle cannot find this version of the Android plugin and the build fails. This will also be the case for CI builds.
The quick fix for this is simply to revert back to Android Gradle plugin 2.2.3, but then you’ll lose features like instant run. And of course this problem will simply go away if and when gradle plugin 2.3.0-alpha3 gets pushed to jcenter.