diff --git a/CHANGELOG.md b/CHANGELOG.md
index 28d32d73..ca7372cd 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -8,6 +8,10 @@
   - [changelog](https://github.com/getsentry/sentry-cli/blob/master/CHANGELOG.md#230)
   - [diff](https://github.com/getsentry/sentry-cli/compare/1.72.0...2.3.0)
 
+### Fixes
+
+- Skip jar processing on AGP < 7.1.2 for signed multi release jars ([#334](https://github.com/getsentry/sentry-android-gradle-plugin/pull/334))
+
 ## 3.1.2
 
 ### Features
diff --git a/plugin-build/src/main/kotlin/io/sentry/android/gradle/transforms/MetaInfStripTransform.kt b/plugin-build/src/main/kotlin/io/sentry/android/gradle/transforms/MetaInfStripTransform.kt
index 734fa278..b508824f 100644
--- a/plugin-build/src/main/kotlin/io/sentry/android/gradle/transforms/MetaInfStripTransform.kt
+++ b/plugin-build/src/main/kotlin/io/sentry/android/gradle/transforms/MetaInfStripTransform.kt
@@ -1,6 +1,9 @@
 package io.sentry.android.gradle.transforms
 
+import io.sentry.android.gradle.SentryPlugin
+import io.sentry.android.gradle.util.warn
 import java.io.File
+import java.nio.file.Files
 import java.util.jar.Attributes
 import java.util.jar.JarEntry
 import java.util.jar.JarFile
@@ -50,9 +53,13 @@ abstract class MetaInfStripTransform : TransformAction<MetaInfStripTransform.Par
         val input = inputArtifact.get().asFile
         val jarFile = JarFile(input)
         if (jarFile.isMultiRelease) {
-            val output = outputs.file("${input.nameWithoutExtension}-meta-inf-stripped.jar")
+            val outputFilename = "${input.nameWithoutExtension}-meta-inf-stripped.jar"
+            val tmpOutputFile = File.createTempFile(
+                "sentry-transformed-${input.nameWithoutExtension}",
+                ".jar"
+            )
             var isStillMultiRelease = false
-            output.jarOutputStream().use { outStream ->
+            tmpOutputFile.jarOutputStream().use { outStream ->
                 val entries = jarFile.entries()
                 // copy each .jar entry, except those that are under META-INF/versions/${unsupported_java_version}
                 while (entries.hasMoreElements()) {
@@ -63,6 +70,19 @@ abstract class MetaInfStripTransform : TransformAction<MetaInfStripTransform.Par
                         continue
                     }
 
+                    if (jarEntry.isSignatureEntry) {
+                        SentryPlugin.logger.warn {
+                            """
+                            Signed Multirelease Jar (${jarFile.name}) found, skipping transform.
+                            This might lead to auto-instrumentation issues due to a bug in AGP (https://issuetracker.google.com/issues/206655905).
+                            Please update to AGP >= 7.1.2 (https://developer.android.com/studio/releases/gradle-plugin) in order to keep using `autoInstrumentation` option.
+                            """.trimIndent()
+                        }
+                        tmpOutputFile.delete()
+                        outputs.file(inputArtifact)
+                        return
+                    }
+
                     if (jarEntry.name.startsWith(versionsDir, ignoreCase = true)) {
                         val javaVersion = jarEntry.javaVersion
                         if (javaVersion > MIN_SUPPORTED_JAVA_VERSION) {
@@ -88,17 +108,23 @@ abstract class MetaInfStripTransform : TransformAction<MetaInfStripTransform.Par
                     outStream.closeEntry()
                 }
             }
+            val transformedOutput = outputs.file(outputFilename)
+            Files.move(tmpOutputFile.toPath(), transformedOutput.toPath())
         } else {
             outputs.file(inputArtifact)
         }
     }
 
+    private val JarEntry.isSignatureEntry get() = signatureFileRegex.matches(name)
+
     private val JarEntry.javaVersion: Int get() = regex.find(name)?.value?.toIntOrNull() ?: 0
 
     private fun File.jarOutputStream(): JarOutputStream = JarOutputStream(outputStream())
 
     companion object {
         private val regex = "(?<=/)([0-9]*)(?=/)".toRegex()
+        private val signatureFileRegex = "^META-INF/.*\\.(SF|DSA|RSA|EC)|^META-INF/SIG-.*"
+            .toRegex()
         private const val versionsDir = "META-INF/versions/"
         private const val MIN_SUPPORTED_JAVA_VERSION = 11
 
diff --git a/plugin-build/src/test/kotlin/io/sentry/android/gradle/SentryPluginMRJarTest.kt b/plugin-build/src/test/kotlin/io/sentry/android/gradle/SentryPluginMRJarTest.kt
index e8ab0174..1ddcc211 100644
--- a/plugin-build/src/test/kotlin/io/sentry/android/gradle/SentryPluginMRJarTest.kt
+++ b/plugin-build/src/test/kotlin/io/sentry/android/gradle/SentryPluginMRJarTest.kt
@@ -33,5 +33,33 @@ class SentryPluginMRJarTest :
         assertTrue { "BUILD SUCCESSFUL" in result.output }
     }
 
+    @Test
+    fun `shows a warning when there is a signed MR-JAR dependency`() {
+        appBuildFile.writeText(
+            // language=Groovy
+            """
+            plugins {
+              id "com.android.application"
+              id "io.sentry.android.gradle"
+            }
+
+            dependencies {
+              implementation("org.bouncycastle:bcprov-jdk15on:1.63")
+            }
+
+            sentry.tracingInstrumentation.enabled = true
+            """.trimIndent()
+        )
+
+        val result = runner
+            .appendArguments("app:assembleDebug")
+            .build()
+
+        print(result.output)
+
+        assertTrue { "Please update to AGP >= 7.1.2" in result.output }
+        assertTrue { "BUILD SUCCESSFUL" in result.output }
+    }
+
     override val additionalRootProjectConfig: String = ""
 }
diff --git a/plugin-build/src/test/kotlin/io/sentry/android/gradle/transforms/MetaInfStripTransformTest.kt b/plugin-build/src/test/kotlin/io/sentry/android/gradle/transforms/MetaInfStripTransformTest.kt
index 0d0456ba..f9b2f058 100644
--- a/plugin-build/src/test/kotlin/io/sentry/android/gradle/transforms/MetaInfStripTransformTest.kt
+++ b/plugin-build/src/test/kotlin/io/sentry/android/gradle/transforms/MetaInfStripTransformTest.kt
@@ -31,12 +31,14 @@ class MetaInfStripTransformTest {
             tmpDir: TemporaryFolder,
             jarName: String = "test.jar",
             multiRelease: Boolean = true,
-            includeSupportedVersion: Boolean = false
+            includeSupportedVersion: Boolean = false,
+            signed: Boolean = false
         ): MetaInfStripTransform {
             val file = tmpDir.newFile(jarName)
             val jar = file.toJar(
                 multiRelease = multiRelease,
-                includeSupportedVersion = includeSupportedVersion
+                includeSupportedVersion = includeSupportedVersion,
+                signed = signed
             )
 
             whenever(provider.get()).thenReturn(RegularFile { jar })
@@ -44,7 +46,11 @@ class MetaInfStripTransformTest {
             return TestMetaInfStripTransform(provider)
         }
 
-        private fun File.toJar(multiRelease: Boolean, includeSupportedVersion: Boolean): File {
+        private fun File.toJar(
+            multiRelease: Boolean,
+            includeSupportedVersion: Boolean,
+            signed: Boolean
+        ): File {
             JarOutputStream(outputStream()).use {
                 // normal classpath
                 it.putNextEntry(ZipEntry("com/squareup/moshi/Types.class"))
@@ -100,6 +106,11 @@ class MetaInfStripTransformTest {
                         )
                         it.closeEntry()
                     }
+
+                    if (signed) {
+                        it.putNextEntry(ZipEntry("META-INF/SIGNING_FILE.SF"))
+                        it.putNextEntry(ZipEntry("META-INF/SIGNING_FILE.DSA"))
+                    }
                 }
 
                 // manifest
@@ -154,6 +165,7 @@ class MetaInfStripTransformTest {
         val outputs = FakeTransformOutputs(tmp)
 
         val sut = fixture.getSut(tmp)
+
         sut.transform(outputs)
 
         val jar = JarFile(outputs.outputFile)
@@ -218,4 +230,17 @@ class MetaInfStripTransformTest {
         }
         return entries
     }
+
+    @Test
+    fun `when multi-release signed-jar, skip transform`() {
+        val outputs = FakeTransformOutputs(tmp)
+
+        val sut = fixture.getSut(tmp, includeSupportedVersion = true, signed = true)
+        sut.transform(outputs)
+
+        val jar = JarFile(outputs.outputFile)
+
+        assertTrue { jar.read().any { it.key.startsWith("META-INF/versions/16") } }
+        assertTrue { outputs.outputFile.name == "test.jar" }
+    }
 }