The quest is added to your Quest book after the Guildmaster gives you the hint about the sword.
He tells you that Maze what obsessed in finding the powerful sword that is hidden deep in the Guild and that you should search his quarters for more information.
Even if its a short and simple quest, the Fable Anniversary walkthrough that is below features all the details regarding The Hidden Sword quest.
Go to Heroes Guild, and follow the Guildmasters advice by heading to Mazes quarters. Search in the book shelves on your right to find out how to retrieve Avos Tear, the Legendary Weapon.
Read through Mazes notes regarding the sword. He says that in order to get the sword you just need to read the inscriptions on the empty gave in the Guild courtyard.
However, it seems that Maze was not worthy enough to get the weapon. But that shouldnt stop you at all. Therefore, go to the courtyard and read the inscription on the empty grave (the one from the west side).
Avos Tear will reveal itself if you are pure of heart, and you can retrieve it only if you chose not to keep the Sword of Aeons at the end of the quest Battle Jack of Blades.