No CPU ABI system image available for this target Error Android Virtual Device

If you are trying to creating a new Android Virtual Device (AVD) and get an error,

No CPU/ABI system image available for this target

Reason :

This is because you do not have system image installed for the API level that you have set as a target.

Solution :

You need to download System Image from the Android SDK Manager

Go to Menu -> Window -> Android SDK Manager

Now under the API level, select ARM EABI v7a System Image and Intel x86 Atom System Image and get it installed.

Restart your Android Eclipse IDE and try creating the AVD you may not get the error anymore.