Android Studio: Plugin with id 'android-library' not found

I've been trying to get ActionBarSherlock to work and having some issue. One issue I've come across is the following message when trying to build it:

Plugin with id 'android-library' not found

Specifically:

D:\Projects\Android\actionbarsherlock>D:\Projects\Android\gradlew --info build
Starting Build
Settings evaluated using empty settings script.
Projects loaded. Root project using build file 
  'D:\Projects\Android\actionbarsherlock\build.gradle'.
Included projects: [root project 'actionbarsherlock']
Evaluating root project 'actionbarsherlock' using build file 
  'D:\Projects\Android\actionbarsherlock\build.gradle'.

FAILURE: Build failed with an exception.

* Where:
Build file 'D:\Projects\Android\actionbarsherlock\build.gradle' line: 1

* What went wrong:
A problem occurred evaluating root project 'actionbarsherlock'.
> Plugin with id 'android-library' not found.

I'm treating this as an ABS issue in a seperate thread, so here I'm curious how to address the general issue of:

Plugin with id 'android-library' not found

Here is the build.gradle:

apply plugin: 'android-library'

dependencies {
  compile 'com.android.support:support-v4:18.0.+'
}

android {
  compileSdkVersion 14
  buildToolsVersion '17.0.0'

  sourceSets {
    main {
      manifest.srcFile 'AndroidManifest.xml'
      java.srcDirs = ['src']
      res.srcDirs = ['res']
    }
  }
}

Can you help?

Instruct Gradle to download Android plugin from Maven Central repository.

You do it by pasting the following code at the beginning of the Gradle build file:

buildscript {
    repositories {
        mavenCentral()
    }
    dependencies {
        classpath 'com.android.tools.build:gradle:1.1.1'
    }
}

Replace version string 1.0.+ with the latest version. Released versions of Gradle plugin can be found in official Maven Repository or on MVNRepository artifact search.

Just for the record (took me quite a while) before Grzegorzs answer worked for me I had to install "android support repository" through the SDK Manager!

Install it and add the following code above apply plugin: 'android-library' in the build.gradle of actionbarsherlock folder!

buildscript {
    repositories {
        mavenCentral()
    }
    dependencies {
        classpath 'com.android.tools.build:gradle:1.0.+'
    }
}

Use

apply plugin: 'com.android.library'

to convert an app module to a library module. More info here: https://developer.android.com/studio/projects/android-library.html

In later versions, the plugin has changed name to:

apply plugin: 'com.android.library'

And as already mentioned by some of the other answers, you need the gradle tools in order to use it. Using 3.0.1, you have to use the google repo, not mavenCentral or jcenter:

buildscript {
    repositories {
        ...
        //In IntelliJ or older versions of Android Studio
        //maven {
        //   url 'https://maven.google.com'
        //}
        google()//in newer versions of Android Studio
    }
    dependencies {
        classpath 'com.android.tools.build:gradle:3.0.1'
    }
}