The appearance of ice I in the smallest possible clusters and the nature of its phase coexistence with liquid water could not thus far be unraveled. The experimental and theoretical infrared spectroscopic and free-energy results of this work show the emergence of the characteristic hydrogen-bonding pattern of ice I in clusters containing only around 90 water molecules. The onset of crystallization is accompanied by an increase of surface oscillator intensity with decreasing surface-to-volume ratio, a spectral indicator of nanoscale crystallinity of water. In the size range from 90 to 150 water molecules, we observe mixtures of largely crystalline and purely amorphous clusters. Our analysis suggests that the liquid-ice I transition in clusters loses its sharp 1st-order character at the end of the crystalline-size regime and occurs over a range of temperatures through heterophasic oscillations in time, a process without analog in bulk water.