We describe a novel technique fully compatible with silicon microelectronic technology for the synthesis of Ge nanocrystals. The approach followed involves UV-assisted low temperature dry oxidation of a strained Si0.8Ge0.2 layer. Initially, oxidation results in the selective formation of SiO2 under which accumulates a Ge-rich SiGe layer. Further irradiation and oxidation of this structure result in the incorporation of Ge nanocrystalline regions from 2 to 8 nm in diameter into the growing SiO2 layer. These Ge nanoparticles exhibit visible photoluminescence in the 550-800 nm range. The temperature of only 550 degrees C employed in our process is significantly less than the 800-850 degrees C levels necessary up till now for the reduction of SiGe oxides to form Ge nanocrystals. Regardless of size, the nanoparticles, being directly formed from the underlying substrate, always exhibit the diamond crystalline structure, as shown by high resolution transmission electron microscopy and Raman spectroscopy.