D365 app for outlook error: This app can’t be installed. The manifest file for this app is too large. It must be smaller than 32 KB.

Few days back, we had a requirement to use new D365 app for Outlook for one of our customer.

After setting up mailbox and Server Side Synchronization(prerequisites for using this lightweight extension), when we clicked on Settings –> Apps for Dynamics 365, we got the below screen:

We waited for few minutes and again checked the same screen for any update on the installation of this app in the background. However, we got the below error message:

We searched over the internet for any resolution to this issue. Unfortunately, we didn’t get any.

Then we raised a product support ticket with Microsoft and it was fixed by the product team. Then when we go the same screen we got the below message:

Hope it helps.