This sword can be found in a locked safe in Dethmold's room beneath the Ruined library in Loc Muinne during the quest "Of His Blood and Bone" on Roche's path. The key to the safe can be looted from Dethmold's body. Along with Caerme, Mourner (Dark Mode only), and Dancer, it is one of the best steel swords in the game.
As of the Enhanced Edition, this sword is now available on Iorveth's path as well. It is located within the Crypt of Mages in the same tower as the quest The Secrets of Loc Muinne. The player must cast Aard or Igni at the appropriate crystals to open a hidden door. Inside the next room is the sword. Taking it activates a boss fight with The Guardian.
Forgotten Vran Sword returns in the third game as a random loot item or from killing certain monsters like Jenny o' the Woods.