A three-dimensional Landau theory of stress-induced martensitic phase transformations is presented. It describes transformations between austenite and martensitic variants and transformations between martensitic variants. The Landau free energy incorporates all temperature-dependent thermomechanical properties of both phases. The theory accounts for the principal features of martensitic transformations in shape memory alloys and steels, namely, stress-strain curves with constant transformation strain and constant, or weakly temperature dependent, stress hysteresis, as well as nonzero tangent elastic moduli at the phase transformation point. In part I, the austenite↔martensite phase transformation is treated, while transformations between martensitic variants are considered in part II.