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We describe a novel approach to grow Si nanostructures embedded into crystalline rare earth oxides using molecular beam epitaxy. By efficiently exploiting the growth kinetics during growth one could create nanostructures exhibiting various dimensions, ranging from three dimensionally confined quantum dots to the quantum wells, where the particles are confined in of the dimensions. The crystalline rare earth oxide that has been used in this study is epitaxial gadolinium oxide (Gd2O3). The room temperature quantum confinement effects characterized by the strong intensity and narrow photoluminescence peak in an array of Si quantum dots embedded in Gd2O3, indicates high crystalline quality and narrow size distribution range of quantum dots. The Si quantum dots with dimension about 3-5 nm exhibited quantum confinement, which was observed in the photoluminescence and photoionization studies. The embedded Si-nanoclusters exhibit excellent charge storage capacity with competent retention and endurance characteristics;, and demonstrate their potential in future nonvolatile memory devices.