This sidequest is very short and simple. At the Wetland Stable, Izra is standing at the river's shore. Talk to him and he will tell you that there is a treasure chest under the water and he can't get it out.
Use your Magnesis rune to fish out the chest. Izra will tell you that he wants to see what's inside, so pop it open for a Royal Broadsword. Talk to Izra again and he will let you keep it and walk off satisfied.