The Sword of Osman was a ceremonial sword of the Ottoman state used by the Ottoman Sultans at the time of their enthronement ceremony.
The history goes back to Osman Bey, the founder of the Ottoman empire. The practice started when Osman Bey was girt with the sword of Islam by his mentor and famous Sufi Dervish Sheikh Edebali.
The first ceremony was held at the grave complex of Abu Ayyub al-Ansari (the companion of Prophet Muhammad ﷺ) in Constantinople (later Istanbul). Abu Ayyub al-Ansari was the standard-bearer of the first siege of Constantinople in 674 CE. He was buried there in Constantinople outside the city walls.
The practice continued during the reign of later Ottoman Sultans. Every time, a Mevlevi Sufi Dervish (the followers of Jalal al-Din Rumi) was summoned by the Ottoman authorities to Istanbul and the ceremony was held according to the tradition.
The Sufis, especially the Mevlevi dervishes, were highly respected throughout the Ottoman Sultanate. Therefore, the Mevlevi Sufi Order flourished a lot during the rule of the Ottoman Empire. However, when Turkey became a republic, a number of Sufi orders were restricted by Mustafa Kemal Pasha.