  The electronic structure of nanowires in contact with metallic electrodes of
experimentally relevant sizes is calculated by incorporating the electrostatic
polarization potential into the atomistic single particle Schr\"odinger
equation. We show that the presence of an electrode produces localized
electron/hole states near the electrode, a phenomenon only exhibited in
nanostructures and overlooked in the past. This phenomenon will have profound
implications on electron transport in such nanosystems. We calculate several
electrode/nanowire geometries, with varying contact depths and nanowire radii.
We demonstrate the change in the band gap of up to 0.5 eV in 3 nm diameter CdSe
nanowires and calculate the magnitude of the applied electric field necessary
to overcome the localization.
