An Android library project is a development project that holds shared Android source code and resources. Other Android application projects can reference the library project and, at build time, include its compiled sources in their
.apk files. IntelliJ IDEA X supports library projects natively as separate Android library modules.
To create a new library module you need to choose a platform and specify a package:
Application module has to depend on library modules to refer to their resources and source code. Scope of this dependency should be Compile. You can refer to library resources from your application module, as they are located in the same module. Note that you can change a module type (Application or Library) in Android facet settings: