"Action not available. To use this action, you must first select the old solution and then try again" message appears in Dynamics 365

When you select a solution in Dynamics 365 and then click the Apply Solution Upgrade button, you encounter the following error:

"Action not available.

To use this action, you must first select the old solution and then try again."

If you click Download Log File, the log file includes a reference to error code -2147187396.

This message appears if the solution you selected is the solution update and not the parent solution.

The Apply Solution Upgrade button is intended to be used when you have imported an update for another solution that is already installed. When importing the updated solution, there is a "Stage for upgrade" option that appears. If this checkbox is selected, the upgrade action is not performed during solution import. An Apply Solution Upgrade button appears at the end of the import process. If you did not click this button, you can find the parent solution in the solution list and then click Apply Solution Upgrade. 

Example: You previously imported a solution called SolutionA that was version 1.0.0.0. Later you import a newer version of SolutionA that is version 1.0.1.0. During the solution import, the "Stage for upgrade" option was selected. If you did not click the Apply Solution Upgrade button that appeared at the end of the import process, you will see SolutionA and also SolutionA_Upgrade in the All Solutions view. If you selected SolutionA_Upgrade and then clicked Apply Solution Upgrade, you would see this error. Instead you need to select the parent solution (SolutionA) and then click Apply Solution Upgrade.

Select the parent solution and then click Apply Solution Upgrade.