By combining cross-sectional transmission and scanning electron microscopy with Raman scattering we have investigated the mechanism of nanocrystal formation in ultrathin amorphous SiO2/Ge/SiO2 trilayers grown by e-beam evaporation as a function of annealing temperature and a-Ge layer thickness. We observe that with decreasing a-Ge thickness the amorphous-to-crystalline (a-to-c) transition occurs at considerably higher temperatures, even avoiding crystallisation for very thin films below 2 nm thickness. Furthermore, we demonstrate that the formation of Ge nanocrystals by annealing at around 900 degrees C takes place driven by a liquid-mediated mechanism. As indicated by the observed microstructure, the metallic liquid film dewets from the surface forming droplets that upon cooling and under the influence of the SiO2 capping layer, solidify into barrel-type nanocrystals.