We present a theory for a new mode of phase separation discovered recently in thin layers of amorphous Al-Ge alloys. Phase separation and crystallization occurs in colonies developing from Al nuclei. Their growth is controlled by diffusion of atomic Ge inside crystalline Al, and by the nucleation and growth of Ge crystallites on the Al-Ge interface. We find that the growth velocity is constant as a consequence of the interaction between the ramified Al-Ge interface and the smooth boundary of the colony with the amorphous phase. Diffusion occurs only in a narrow strip controlled by a length scale related to the width of the Ge dendrites. Solution of the growth equations leads to a velocity selection mechanism as long as the Ge concentration is above a critical threshold. The basic length scale is argued to be controlled by a competition between nucleation and growth of the Ge crystallites.