Understanding, creating, and manipulating spin polarization of two-dimensional electron gases at complex oxide interfaces presents an experimental challenge. For example, despite almost a decade long research effort, the microscopic origin of ferromagnetism in LaAlO3/SrTiO3 heterojunction is still an open question. Here, by using a prototypical two-dimensional electron gas (2DEG) which emerges at the interface between band insulator SrTiO3 and antiferromagnetic Mott insulator LaTiO3 , the experiment reveals the evidence for magnetic phase separation in hole-doped Ti d1 t2g system resulting in spin-polarized 2DEG. The details of electronic and magnetic properties of the 2DEG were investigated by temperature-dependent d.c. transport, angle-dependent X-ray photoemission spectroscopy, and temperature-dependent magnetoresistance. The observation of clear hysteresis in magnetotransport at low magnetic fields implies spin-polarization from magnetic islands in the hole rich LaTiO3 near the interface. These findings emphasize the role of magnetic instabilities in doped Mott insulators thus providing another path for designing all-oxide structures relevant to spintronics applications.