Unknown protocol type: 'file': I keep getting an error while creating a Virtual Machine in vert-manager on Ubuntu

Question

I'm running Ubuntu 20.04.3 and just installed virt-manager along with QEMU/KVM.

I keep getting an error after the final step of creating a virtual machine.

Unable to complete install: 'unsupported configuration: unknown protocol type 'file''

Traceback (most recent call last):
  File "/usr/share/virt-manager/virtManager/asyncjob.py", line 75, in cb_wrapper
    callback(asyncjob, *args, **kwargs)
  File "/usr/share/virt-manager/virtManager/createvm.py", line 2089, in _do_async_install
    guest.installer_instance.start_install(guest, meter=meter)
  File "/usr/share/virt-manager/virtinst/install/installer.py", line 542, in start_install
    domain = self._create_guest(
  File "/usr/share/virt-manager/virtinst/install/installer.py", line 491, in _create_guest
    domain = self.conn.createXML(install_xml or final_xml, 0)
  File "/usr/lib/python3/dist-packages/libvirt.py", line 4034, in createXML
    if ret is None:raise libvirtError('virDomainCreateXML() failed', conn=self)
libvirt.libvirtError: unsupported configuration: unknown protocol type 'file'

I tried many options, fiddled with Storage pools, created images externally, but nothing seems to work.