We study the nucleation dynamics of a model solid state transformation and the criterion for microstructure selection using a molecular dynamics (MD) simulation. Our simulations show a range of microstructures depending on the depth of quench. We closely follow the dynamics of the solid and find that transient {em non-affine zones} (NAZ) are created at and evolve with the rapidly moving transformation front. The dynamics of these plastic regions determines the selection of microstructure. We formulate an {it elastoplastic model} which couples the elastic strain to the non-affine deformation, and recover all the qualitative features of the MD simulation. Using this model, we construct a dynamical phase diagram for microstructure selection, in addition to making definite testable predictions.