Error in building release apk with latest updates

I recently updated Android Studio on my machine to version

Android Studio 3.1
Build #AI-173.4670197, built on March 22, 2018
JRE: 1.8.0_152-release-1024-b01 x86_64
JVM: OpenJDK 64-Bit Server VM by JetBrains s.r.o
Mac OS X 10.13.3

Also, I replaced all the compile statements with implementation. And finally I updated:

buildToolsVersion to 27.0.3
com.android.tools.build:gradle to 3.1.1

After these changes when I now try to build my release apk, it says the following:

Cannot create android app from an archive '/Users/swapnilgupta/work/musicmuni/riyaz/app/build/intermediates/transforms/proguard/prod/release/0.jar' containing both DEX and Java-bytecode content

with the following stacktrace

    org.gradle.api.tasks.TaskExecutionException: Execution failed for task ':app:transformClassesWithMultidexlistForProdRelease'.
    at org.gradle.api.internal.tasks.execution.ExecuteActionsTaskExecuter.executeActions(ExecuteActionsTaskExecuter.java:100)
    at org.gradle.api.internal.tasks.execution.ExecuteActionsTaskExecuter.execute(ExecuteActionsTaskExecuter.java:70)
    at org.gradle.api.internal.tasks.execution.OutputDirectoryCreatingTaskExecuter.execute(OutputDirectoryCreatingTaskExecuter.java:51)
    at org.gradle.api.internal.tasks.execution.SkipUpToDateTaskExecuter.execute(SkipUpToDateTaskExecuter.java:62)
    at org.gradle.api.internal.tasks.execution.ResolveTaskOutputCachingStateExecuter.execute(ResolveTaskOutputCachingStateExecuter.java:54)
    at org.gradle.api.internal.tasks.execution.ValidatingTaskExecuter.execute(ValidatingTaskExecuter.java:60)
    at org.gradle.api.internal.tasks.execution.SkipEmptySourceFilesTaskExecuter.execute(SkipEmptySourceFilesTaskExecuter.java:97)
    at org.gradle.api.internal.tasks.execution.CleanupStaleOutputsExecuter.execute(CleanupStaleOutputsExecuter.java:87)
    at org.gradle.api.internal.tasks.execution.ResolveTaskArtifactStateTaskExecuter.execute(ResolveTaskArtifactStateTaskExecuter.java:52)
    at org.gradle.api.internal.tasks.execution.SkipTaskWithNoActionsExecuter.execute(SkipTaskWithNoActionsExecuter.java:52)
    at org.gradle.api.internal.tasks.execution.SkipOnlyIfTaskExecuter.execute(SkipOnlyIfTaskExecuter.java:54)
    at org.gradle.api.internal.tasks.execution.ExecuteAtMostOnceTaskExecuter.execute(ExecuteAtMostOnceTaskExecuter.java:43)
    at org.gradle.api.internal.tasks.execution.CatchExceptionTaskExecuter.execute(CatchExceptionTaskExecuter.java:34)
    at org.gradle.execution.taskgraph.DefaultTaskGraphExecuter$EventFiringTaskWorker$1.run(DefaultTaskGraphExecuter.java:248)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor$RunnableBuildOperationWorker.execute(DefaultBuildOperationExecutor.java:336)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor$RunnableBuildOperationWorker.execute(DefaultBuildOperationExecutor.java:328)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor.execute(DefaultBuildOperationExecutor.java:199)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor.run(DefaultBuildOperationExecutor.java:110)
    at org.gradle.execution.taskgraph.DefaultTaskGraphExecuter$EventFiringTaskWorker.execute(DefaultTaskGraphExecuter.java:241)
    at org.gradle.execution.taskgraph.DefaultTaskGraphExecuter$EventFiringTaskWorker.execute(DefaultTaskGraphExecuter.java:230)
    at org.gradle.execution.taskgraph.DefaultTaskPlanExecutor$TaskExecutorWorker.processTask(DefaultTaskPlanExecutor.java:123)
    at org.gradle.execution.taskgraph.DefaultTaskPlanExecutor$TaskExecutorWorker.access$200(DefaultTaskPlanExecutor.java:79)
    at org.gradle.execution.taskgraph.DefaultTaskPlanExecutor$TaskExecutorWorker$1.execute(DefaultTaskPlanExecutor.java:104)
    at org.gradle.execution.taskgraph.DefaultTaskPlanExecutor$TaskExecutorWorker$1.execute(DefaultTaskPlanExecutor.java:98)
    at org.gradle.execution.taskgraph.DefaultTaskExecutionPlan.execute(DefaultTaskExecutionPlan.java:626)
    at org.gradle.execution.taskgraph.DefaultTaskExecutionPlan.executeWithTask(DefaultTaskExecutionPlan.java:581)
    at org.gradle.execution.taskgraph.DefaultTaskPlanExecutor$TaskExecutorWorker.run(DefaultTaskPlanExecutor.java:98)
    at org.gradle.internal.concurrent.ExecutorPolicy$CatchAndRecordFailures.onExecute(ExecutorPolicy.java:63)
    at org.gradle.internal.concurrent.ManagedExecutorImpl$1.run(ManagedExecutorImpl.java:46)
    at java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1142)
    at java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:617)
    at org.gradle.internal.concurrent.ThreadFactoryImpl$ManagedThreadRunnable.run(ThreadFactoryImpl.java:55)
    at java.lang.Thread.run(Thread.java:745)
Caused by: java.lang.RuntimeException: com.android.build.api.transform.TransformException: Error while generating the main dex list.
    at com.android.builder.profile.Recorder$Block.handleException(Recorder.java:55)
    at com.android.builder.profile.ThreadRecorder.record(ThreadRecorder.java:104)
    at com.android.build.gradle.internal.pipeline.TransformTask.transform(TransformTask.java:212)
    at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
    at sun.reflect.NativeMethodAccessorImpl.invoke(NativeMethodAccessorImpl.java:62)
    at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:43)
    at java.lang.reflect.Method.invoke(Method.java:498)
    at org.gradle.internal.reflect.JavaMethod.invoke(JavaMethod.java:73)
    at org.gradle.api.internal.project.taskfactory.IncrementalTaskAction.doExecute(IncrementalTaskAction.java:46)
    at org.gradle.api.internal.project.taskfactory.StandardTaskAction.execute(StandardTaskAction.java:39)
    at org.gradle.api.internal.project.taskfactory.StandardTaskAction.execute(StandardTaskAction.java:26)
    at org.gradle.api.internal.tasks.execution.ExecuteActionsTaskExecuter$1.run(ExecuteActionsTaskExecuter.java:121)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor$RunnableBuildOperationWorker.execute(DefaultBuildOperationExecutor.java:336)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor$RunnableBuildOperationWorker.execute(DefaultBuildOperationExecutor.java:328)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor.execute(DefaultBuildOperationExecutor.java:199)
    at org.gradle.internal.progress.DefaultBuildOperationExecutor.run(DefaultBuildOperationExecutor.java:110)
    at org.gradle.api.internal.tasks.execution.ExecuteActionsTaskExecuter.executeAction(ExecuteActionsTaskExecuter.java:110)
    at org.gradle.api.internal.tasks.execution.ExecuteActionsTaskExecuter.executeActions(ExecuteActionsTaskExecuter.java:92)
    ... 32 more
Caused by: com.android.build.api.transform.TransformException: Error while generating the main dex list.
    at com.android.build.gradle.internal.transforms.D8MainDexListTransform.transform(D8MainDexListTransform.kt:127)
    at com.android.build.gradle.internal.pipeline.TransformTask$2.call(TransformTask.java:221)
    at com.android.build.gradle.internal.pipeline.TransformTask$2.call(TransformTask.java:217)
    at com.android.builder.profile.ThreadRecorder.record(ThreadRecorder.java:102)
    ... 48 more

I am clueless as to what is happening. I have tried deleting the .gradle/ from the project directory but I still face this issue. Any help on this?

As mentioned in the gradle plugin docs

By default, Android Studio now uses a new DEX compiler called D8. DEX compilation is the process of transforming .class bytecode into .dex bytecode for the Android Runtime (or Dalvik, for older versions of Android). Compared to the previous compiler, called DX, D8 compiles faster and outputs smaller DEX files, all while having the same or better app runtime performance.

D8 shouldn't change your day-to-day app development workflow. However, if you experience any issues related to the new compiler, please report a bug. You can temporarily disable D8 and use DX by including the following in your project's gradle.properties file:

android.enableD8=false

I have used this for now and the release apk builds fine.