Upgrading to .NET Core 2.0: PackageTargetFallback and AssetTargetFallback cannot be used together

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When upgrading a project that is compiling and running fine on .NET Core 1.0 or 1.1, updating the target framework to .NET Core 2.0 (netcoreapp2.0) causes the build to fail with the following error:

 error NU1003: PackageTargetFallback and AssetTargetFallback cannot be used together. Remove PackageTargetFallback(deprecated) references from the project environment.

What is the reason for this error and how can it be resolved to make the project build again?

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