Android Studio Library Module Gradle Configuration Error

Question

In Android studio 1.0 RC 4, I am trying to import an eclipse Library project without exporting the library to create gradle file from eclipse.

After importing the library as a module, while compiling my project, it throws me a configuration error "Error : Module cannot be an android library"

I guess this has something to do with the mylibrar.gradle file but i checked and it has no errors. Any ideas on this error guyz.

mylibrary.gradle

apply plugin: 'com.android.library'

android {
    compileSdkVersion 21
    buildToolsVersion "21.1.1"

    defaultConfig {
        /*applicationId "xxxx"*/ // Library project doesnot have application id
        minSdkVersion 9
        targetSdkVersion 21
    }

    buildTypes {
        release {
            minifyEnabled false
            proguardFiles getDefaultProguardFile('proguard-android.txt'), 'proguard-rules.txt'
        }
    }
}

dependencies {
    compile files('libs/yyy.jar')
}