Master Sword is an iconic and powerfull sword known recurring througout the Zelda series. In this installment, players also can obtain this weapon. However, it is well hidden and it's actually possible to finish the whole game without finding it.
Master Sword is located near the center of the Great Hyrule Forest, west of the Hyrule Castle. In order to reach the weapon, you have to break through the Lost Woods. The locations is traitorous - if you just dash forwards, dense fog will soon embrace you, and you'll be retracted to the beginning of the location. To get to the center of the forest, you have to follow the beacons (like this one above). When you reach the last one, light your torch and carefully try to go any way you think is fit - if the fog becomes denser, you have to turn back right away and look for another path. You also should pay attention to the direction the glowing things are gliding - try to always follow them.
Master Sword is embedded in a stone. It's not enough to just grab it and take it away, though - it has its price: 13 hearts. Temporary hearts don't count, so you can only obtain this weapon in latter part of the game. Remember that additional hearts can be obtained by discovering hidden shrines - you need to visit exactly 40 of those to get enough hearts.
As concerns the weapon itself, it's indestructible and if you have all hearts it shoots fireballs at enemies. Additionally, the weapon doubles the damage dealt to dungeon bosses, or the Ganon itself. Hence it's a very handy tool, especially in case of more challenging fights. Attention! If you overuse Master Sword, the weapon will become unavailable for ten minutes. You will have to wait until the weapon recharges. Hence it's a good idea to save this sword for the toughest fights as well as to get it before the final stages of the game - they will be much easier.