Glass transition and relaxation of the glycerol-water binary mixture system are studied over the glycerol concentration range of 5 - 85 mol% using the highly sensitive technique of spin probe ESR. For the water rich mixture the glass transition, sensed by the spin probe, arises from the vitrified mesoscopic portion of the binary system. The concentration dependence of the glass transition temperature manifests a closely related molecular level cooperativity in the system. A drastic change in the mesoscopic structure of the system at the critical concentration of 40 mol% is confirmed by an estimation of the spin probe effective volume in a temperature range where the tracer reorientation is strongly coupled to the system dynamics.