Well, the text below was taken from TibiaFandom:
The Magic Longsword first entered Tibia when Arieswar, Taghor and another very powerful person at that time were exploring the Plains of Havoc in search of a way to enter Knightwatch Tower, with the knowledge that picks would now open new holes. This was discovered by Taghor when, after an update, he went running around the areas surrounding Carlin and found a hole. He went down the hole and found Guido down there, who told him to go away. Taghor decided to return later only to find the hole was no longer there. Taghor began doing everything to the spot where the hole had been and eventually tried the pick.
After discovering the room currently known for containing the Ornamented Shield quest, they noticed a body under a fire field. Inside this body was a key to the Knightwatch Tower, a book, some assorted junk, and an item with a plain sword graphic. Upon further inspection of this sword, one-handed with attack 80 and defense 60, they soon realized just what they had stumbled upon. Taghor received a Magic Sword as compensation and attempts were made to keep this discovery quiet. Less than a week went by before Guido, furious that a map editor had hidden this weapon for himself, angrily demanded the weapon.
Second Discovery
The Magic Longsword was once again discovered, this time Arieswar found it in a killed Cyclops. Once again, this sword was also destroyed by CipSoft along with possibly other priceless items contained in Arieswar's depot.
Tibia Convention Award
The Magic Longsword finally resurfaced (with reduced stats of Atk: 55, Def: 40) and was awarded to Hagbard at the Tibia Convention in Germany.
Auctions and Sales
Hagbard decided to sell the sword, so he held an auction, which was won by Alex with a bid of 5.5 million gp.
The sword was purchased for 5.5kk by Siobkerry, of Hokuten. He then turned around to sell the sword for 7kk to Recca, but there was a problem. Tibia's first official war was going on, and it was Hokuten, vs. Satori, which was Recca's guild. Seeing as safe trade could not handle the amount of items necessary for this trade, it was decided that the only way the sword could be traded safely between these two enemies was for a middle man to do the trading. They called upon Tibia's finest, and most renowned trader, Alex. Alex was only a lvl 20 druid, but he had been trading for so many years (before safe trade) that he was the most trustable man in Tibia. There was one fatal flaw to Recca's plan, which was the key to Alex's plan... Alex was (TOP secretly) also Strenni, a well known sorcerer who was a member of Hokuten. The trade went as previously described, except that Siobkerry and Alex obviously robbed all of the money from Recca, their enemy. The items could all be seen in the Dark Mansion for some time, as Hokuten was the original owner of this Devious Dwelling.
Hokuten went down in history as the first people to kill a lvl 100+ when they killed Wurzel who had been hunting in the dwarf mines of Kazordoon. Siobkerry (level 62), Kubik (44) and Ghadir (26) went down with a surprise attack which was intended to make him flee from hunting, but ended in spectacular fashion. Later Siobkerry killed Recca at the famous battle of Thais, acquiring his only item he had left, his Helmet of the Stars. He threw the Helmet in the Dark Mansion where his guildmates safeguarded it and slapped on a warrior helmet. He was hunted down on his way to flee to Mintwallin and dropped his warrior helmet as a result. They were dominating the war for some months, until Precise (first paladin to get 100 dist), Brakiss, Deathwalker (GM dismissed for his participation in this), and many other members of their guild were caught duping items using the Black Knight Spawn Door trick, which was fixed shortly after. After sustaining a massive loss, the Hokuten all moved to Amera, where the guild "Boondock Saints" was started. And this continued what is to be known as the "Curse of the Cyclops Sword." As per the location of the sword now, it is said that its curse has been passed on... For years it was shown by Lightbringer and Alex in group rare item displays.
This whole story has been since added to a book that can be found on The Isle of the Kings, and can be told to you by reaching the characters Brakiss, Ghaleon, Siobkerry, Slayn, Alex, Nobak, Cyrus Blackheart, Flamehead, or Vex Blankie, on the Hokuten Side (Antica). On the Satori Side, you could contact Recca, Hesperides, Elrik (some say Tibia's oldest player), but most of the players currently in Satori do not remember such an ancient tale. In fact few due, thus the confusion on this matter.
Somewhere... That sword is out there, cursed!
NOTES: It is the strongest non-throwable weapon, besides the Ice Rapier which has 60 attack but breaks in one hit, and the Umbral Master Hammer, which increases club fighting by 3. Also known as the Cyclopmania Sword, Cyc Sword and Godslayer. This sword is not available from any monster or quest so far.
The ingame legend is as follows:
Many many years ago the evil god Brog enslaved Cyclopes to smith weapons for his perilous armies. In secrecy, the smiths created this powerful weapon in order to commit mutiny against their captor. They failed at the task of slaying Brog, however he was heavily wounded. Filled with unspeakable rage he cast the sword down into the lands of Tibia to be lost forever. While buried in Brog's flesh, it became covered with his horrible blood, which hardened the blade and enchanted the Godslayer with unmatched power. However, a dark curse has been cast upon the blade causing its owner to become stricken with awesome madness and horrible luck. It is said nothing good can come to he who possesses the mystical blade.