With the release of the Android Lollypop SDK, Google have also updated the support libraries. The good news is that the AppCompat library already contains support for the new material theme so you can update your existing apps with very little effort.

It would probably be a good idea to read about using the material theme and using the new support library before proceeding.

Java 7+

The Lollypop build tools require Java 7 upwards, just download JDK 7 or JDK 8 and install it, if you haven't already done so.

Note: The Android Studio application plist still requires Java 1.6, if you don't want to have multiple versions of Java floating around it seems to work without issue if you edit the plist.

Update build.gradle

Simply update all the SDK versions below 21 to 21 throughout your build.gradle, typically this will be as follows:

android {
    compileSdkVersion 21
    buildToolsVersion "21.0.2"
    defaultConfig {
        targetSdkVersion 21

Then update any support library dependencies:

dependencies {
    compile 'com.android.support:support-v4:21.0.0'
    compile 'com.android.support:appcompat-v7:21.0.0'

Build and run and you should now have the material theme!

If you run into a gradle error about the Java version, you will need to point Android Studio at the correct JDK.

Implement the matherial theme for v21

Now that you have updated the support libraries, you should proceed with implementing the v21 material theme for Lollypop devices.