In order to create an archive page you must go to Dashboard -> Design -> Page Elements. Then create an archive widget, proceed to drag and place your archive widget directly below your Blog Posts gadget.
From blogger, click the Posting | Edit Pages tab, then click New Page. Ideally name your new page 'Archive' and leave this page blank for now.
Then go to the Edit HTML button in the design tab, click control + F and search for </b:skin> and place the following line of text directly below: </b:skin>
<b:if cond='data:blog.url == "http://www.example.com/p/archive.html"'>
<b:if cond="data:blog.url != "http://www.example.com/p/archive.html"">
Step 4Copy the web address of your newly created blog's archive page, and replace the section in red with it. Be sure to include the .html part of your custom domain name or with your blogspot address. e.g. with example.com/p/archive.
Now save your template, and your done. Note, you must only have one archive widget on your blog and it must be in the location specified in this post in order to work.