By combining atom probe tomography (APT) with transmission electron microscopy (TEM) we have attempted to identify the stage at which solute clusters transform into compounds crystallographically distinct from the matrix, in the precipitation of the G-phase (Ni16Si7Mn6) from ferrite solid solution subjected to isothermal annealing at 673 K. Based on a systematic analysis on the number density, size, composition and structure of solute clusters as a function of annealing time, the nucleation of the G-phase was found to occur via a two-step process: spontaneous growth of solute clusters first, followed by a structural change transforming into the G-phase. Moreover, the structural change was found to occur via another two-step process. There was a time lag between the end of cluster growth to become a critical size (mean diameter: ∼2.6 nm) and the start of the structural change. During the incubation period solute enrichment occurred inside the clusters without further size growth, indicating that the nucleation of the G-phase occurs at the critical size with a critical composition. Judging from the results of APT, TEM and the simulation of electron diffraction patterns, the critical composition was estimated to be Ni16Si3.5(Fe,Cr)3.5Mn6. Display omitted