With ellipsometry, x-ray diffraction, and resistance measurements we investigated the electric-field effect on the confined electrons at the LaAlO3/SrTiO3 interface. We obtained evidence that the localization of the electrons at negative gate voltage is induced, or at least enhanced, by a polar phase transition in SrTiO3 which strongly reduces the lattice polarizability and the subsequent screening. In particular, we show that the charge localization and the polar order of SrTiO3 both develop below ∼50 K and exhibit similar, unipolar hysteresis loops as a function of the gate voltage.