DataBinding not working after Upgrade Android Studio 2.3

android-apt and hence using apt has been deprecated since Android Studio 2.2.
Following the android-apt migration guide, instead add the following to your build.gradle:

dependencies {
    classpath 'com.android.tools.build:gradle:2.3.0' // use same gradle version!
    annotationProcessor 'com.android.databinding:compiler:2.3.0'
}

If you are using Kolin, instead use:

apply plugin: 'kotlin-kapt'

dependencies {
    classpath 'com.android.tools.build:gradle:2.3.0' // use same gradle version!
    kapt 'com.android.databinding:compiler:2.3.0'
}

The problem comes in a warning that is difficult to see amongst all of the errors:

Warning:Using incompatible plugins for the annotation processing: android-apt. This may result in an unexpected behavior.

If you remove apt, data binding works.

I have also faced the same issue. I was using ButterKnife and Dagger!!

Solved as follow

1) Remove from app level gradle file:

 apply plugin: 'android-apt' 
 or apply plugin: 'com.neenbedankt.android-apt'

2) Remove from project level gradle file:

classpath 'com.neenbedankt.gradle.plugins:android-apt:1.8'

3) And simply change "apt to annotationProcessor" as following dependencies:

 apt 'com.jakewharton:butterknife-compiler:8.5.1',
 apt "com.google.dagger:dagger-compiler:2.5"

To:

annotationProcessor 'com.jakewharton:butterknife-compiler:8.5.1',
annotationProcessor "com.google.dagger:dagger-compiler:2.5"

Data binding also broke for us following the update to Android Studio v2.3. The GoLang Bind plugin became unable to generate library .aar files

Our problem was resolved via a combination of GoMobile version "+eb90329 Mar 7 2017" update and GoBind plugin revert to version "0.2.6" (although the current version is "0.2.8")

Update GoMobile:

  $ go get -u -x golang.org/x/mobile/cmd/gomobile
  $ gomobile init -x

Revert GoBind plugin in build.gradle:

  plugins {
    id "org.golang.mobile.bind" version "0.2.6"
  }

This solution is working on systems with go version 1.7.1 and 1.8 as well as Android Studio versions 2.1.2, 2.2.3, and 2.3.