diff --git a/extension/jdtls.ext/com.microsoft.gradle.bs.importer/src/com/microsoft/gradle/bs/importer/GradleBuildServerBuildSupport.java b/extension/jdtls.ext/com.microsoft.gradle.bs.importer/src/com/microsoft/gradle/bs/importer/GradleBuildServerBuildSupport.java
index 978d36b9e..e004eae80 100644
--- a/extension/jdtls.ext/com.microsoft.gradle.bs.importer/src/com/microsoft/gradle/bs/importer/GradleBuildServerBuildSupport.java
+++ b/extension/jdtls.ext/com.microsoft.gradle.bs.importer/src/com/microsoft/gradle/bs/importer/GradleBuildServerBuildSupport.java
@@ -513,30 +513,33 @@ private void setProjectJdk(Map<IPath, IClasspathEntry> classpathMap, List<BuildT
             javaProject.setOption(JavaCore.COMPILER_COMPLIANCE, targetCompatibility);
         }
 
-        String highestJavaVersion = getHighestCompatibleJavaVersion(jvmBuildTarget.getGradleVersion());
-        try {
-            IVMInstall vm = EclipseVmUtil.findOrRegisterStandardVM(
-                targetCompatibility, // expectedVersion
-                sourceCompatibility, // lowestVersion
-                highestJavaVersion,
-                new File(new URI(jvmBuildTarget.getJavaHome())) // fallback jdk
-            );
+        if (StringUtils.isNotBlank(jvmBuildTarget.getJavaHome())
+            && StringUtils.isNotBlank(jvmBuildTarget.getGradleVersion())) {
+            String highestJavaVersion = getHighestCompatibleJavaVersion(jvmBuildTarget.getGradleVersion());
+            try {
+                IVMInstall vm = EclipseVmUtil.findOrRegisterStandardVM(
+                    targetCompatibility, // expectedVersion
+                    sourceCompatibility, // lowestVersion
+                    highestJavaVersion,
+                    new File(new URI(jvmBuildTarget.getJavaHome())) // fallback jdk
+                );
 
-            List<IClasspathAttribute> classpathAttributes = new LinkedList<>();
-            if (isModular) {
-                classpathAttributes.add(modularAttribute);
+                List<IClasspathAttribute> classpathAttributes = new LinkedList<>();
+                if (isModular) {
+                    classpathAttributes.add(modularAttribute);
+                }
+                classpathAttributes.add(buildServerAttribute);
+                IClasspathEntry jdkEntry = JavaCore.newContainerEntry(
+                    JavaRuntime.newJREContainerPath(vm),
+                    ClasspathEntry.NO_ACCESS_RULES,
+                    classpathAttributes.toArray(new IClasspathAttribute[0]),
+                    false /*isExported*/
+                );
+                classpathMap.putIfAbsent(jdkEntry.getPath(), jdkEntry);
+            } catch (URISyntaxException e) {
+                throw new CoreException(new Status(IStatus.ERROR, ImporterPlugin.PLUGIN_ID,
+                        "Invalid Java home: " + jvmBuildTarget.getJavaHome(), e));
             }
-            classpathAttributes.add(buildServerAttribute);
-            IClasspathEntry jdkEntry = JavaCore.newContainerEntry(
-                JavaRuntime.newJREContainerPath(vm),
-                ClasspathEntry.NO_ACCESS_RULES,
-                classpathAttributes.toArray(new IClasspathAttribute[0]),
-                false /*isExported*/
-            );
-            classpathMap.putIfAbsent(jdkEntry.getPath(), jdkEntry);
-        } catch (URISyntaxException e) {
-            throw new CoreException(new Status(IStatus.ERROR, ImporterPlugin.PLUGIN_ID,
-                    "Invalid Java home: " + jvmBuildTarget.getJavaHome(), e));
         }
     }
 
@@ -585,8 +588,10 @@ private JvmBuildTargetEx getJvmTarget(List<BuildTarget> buildTargets) throws Cor
         }
 
         if (StringUtils.isBlank(jvmTarget.getJavaHome()) || StringUtils.isBlank(jvmTarget.getGradleVersion())) {
-            throw new CoreException(new Status(IStatus.ERROR, ImporterPlugin.PLUGIN_ID,
-                    "Invalid JVM build target: " + jvmTarget.toString()));
+            JavaLanguageServerPlugin.logException(
+                new CoreException(new Status(IStatus.WARNING, ImporterPlugin.PLUGIN_ID,
+                    "Empty Java Home or Gradle Version in JVM target."))
+            );
         }
 
         return jvmTarget;
@@ -641,7 +646,8 @@ private List<IClasspathEntry> getDependencyJars(DependencyModulesResult dependen
                     }
                     String classifier = artifactData.getClassifier();
                     try {
-                        File jarFile = new File(new URI(uri));
+                        File artifactFile = new File(new URI(uri));
+                        File jarFile = Utils.getJarFile(artifactFile);
                         if (classifier == null) {
                             artifact = jarFile;
                         } else if ("sources".equals(classifier)) {
diff --git a/extension/jdtls.ext/com.microsoft.gradle.bs.importer/src/com/microsoft/gradle/bs/importer/Utils.java b/extension/jdtls.ext/com.microsoft.gradle.bs.importer/src/com/microsoft/gradle/bs/importer/Utils.java
index fd312aee6..c365b5dd6 100644
--- a/extension/jdtls.ext/com.microsoft.gradle.bs.importer/src/com/microsoft/gradle/bs/importer/Utils.java
+++ b/extension/jdtls.ext/com.microsoft.gradle.bs.importer/src/com/microsoft/gradle/bs/importer/Utils.java
@@ -2,14 +2,21 @@
 
 import static org.eclipse.jdt.ls.core.internal.handlers.MapFlattener.getString;
 
+import java.io.File;
+import java.io.FileInputStream;
+import java.io.FileOutputStream;
+import java.io.IOException;
 import java.net.URI;
 import java.net.URISyntaxException;
+import java.nio.file.Path;
 import java.util.Arrays;
 import java.util.LinkedList;
 import java.util.List;
 import java.util.Map;
 import java.util.Objects;
 import java.util.stream.Collectors;
+import java.util.zip.ZipEntry;
+import java.util.zip.ZipInputStream;
 
 import org.eclipse.core.resources.ICommand;
 import org.eclipse.core.resources.IProject;
@@ -22,6 +29,7 @@
 import org.eclipse.core.runtime.URIUtil;
 import org.eclipse.jdt.core.JavaCore;
 import org.eclipse.jdt.ls.core.internal.JavaClientConnection.JavaLanguageClient;
+import org.eclipse.jdt.ls.core.internal.JavaLanguageServerPlugin;
 import org.eclipse.jdt.ls.core.internal.ProjectUtils;
 import org.eclipse.jdt.ls.core.internal.preferences.Preferences;
 import org.eclipse.lsp4j.ExecuteCommandParams;
@@ -214,4 +222,46 @@ public static void sendTelemetry(JavaLanguageClient client, Object message) {
     client.sendNotification(new ExecuteCommandParams("_java.gradle.buildServer.sendTelemetry",
         Arrays.asList(message)));
   }
+
+  /**
+   * Extracts the jar file from the aar file, since JDT.LS is not able to understand
+   * the structure of aar files.
+  */
+  public static File getJarFile(File file) {
+
+    String filepath = file.getAbsolutePath();
+
+    if (filepath.endsWith(".aar")) {
+
+      // Extracting classes.jar from AAR files
+      try(ZipInputStream is = new ZipInputStream(new FileInputStream(file))) {
+
+        ZipEntry entry;
+        while ((entry = is.getNextEntry()) != null) {
+          if (entry.getName().equals("classes.jar")) {
+            String fileName = file.getName();
+            fileName = fileName.substring(0, fileName.length() - 4);
+            fileName = fileName + ".jar";
+            File outputFile = Path.of(file.getParentFile().getAbsolutePath(), fileName).toFile();
+            try (FileOutputStream outputStream = new FileOutputStream(outputFile)) {
+              byte[] buffer = new byte[1024];
+              int len;
+              while((len = is.read(buffer)) > 0) {
+                outputStream.write(buffer, 0, len);
+              }
+              return outputFile;
+            }
+          }
+        }
+
+      } catch(IOException e) {
+        JavaLanguageServerPlugin.logException(e);
+      }
+
+    }
+
+    return file;
+
+  }
+
 }