Starting from Android Gradle plugin 2.2 built-in configuration for annotation processors is available. Previously that functionality has been provided by 3rd party project android-apt. There is a little issue with new configuration. Namely, files placed in test source sets are not added to Java model thus they are not recognized by IDE (Android Studio) and marked red however they are normally compilable. This article describes how to fix that issue.

Project link: https://www.thedroidsonroids.com/blog/make-generated-java-test-sources-recognizable-ide