This is a part of the Silver Sword.
It can be obtained from Saemon Havarian as a reward for helping him get a new ship. This is done by choosing to go by sea instead of through the portal, after you have escaped the asylum in Chapter 4. This is the better option since, apart from getting the blade, you would miss a whole area (City of Caverns) if you chose the portal. However, since the blade can be pickpocketed from Saemon, you can get it and still go through the portal.
In-game description Edit
|“||This is a piece of Silver Sword, a vorpal two-handed sword used by the githyanki and considered holy by them. It is magically sharp and can sever limbs and heads with ease. If the whole weapon could be found, it could be magically reforged.||”|