We report on a strain-induced phase transformation in Ge nanowires under external shear stresses. The resulted polytype heterostructure may have great potential for photonics and thermoelectric applications. ⟨111⟩-oriented Ge nanowires with standard diamond structure (3C) undergo a phase transformation toward the hexagonal diamond phase referred as the 2H-allotrope. The phase transformation occurs heterogeneously on shear bands along the length of the nanowire. The structure meets the common phenomenological criteria of a martensitic phase transformation. This point is discussed to initiate an on going debate on the transformation mechanisms. The process results in unprecedented quasiperiodic heterostructures 3C/2H along the Ge nanowire. The thermal stability of those 2H domains is also studied under annealing up to 650 °C by in situ TEM.