From Zelda Dungeon Wiki
The Swordsmiths will gladly temper the Master Sword for a paltry sum. By the time this happens, Link will have done them a huge favor. "
— Nintendo Power Player's Guidesword from A Link to the Past. It is an upgraded version of the Master Sword, making it the second strongest sword in the game. If Link rescues the Dwarven Swordsmith trapped in the Dark World and brings him back to his brother in the Light World, he and his brother will offer to temper his Master Sword. If Link agrees, he receives the Tempered Sword after some time has passed.