Actually, the holy sword is not usable right away. It is part of a set of 3 holy items which must be brought together, as the mouse-over text describes. You get this quest from a book in the basement of the cursed abbey. The holy sword is potentially one of the most powerful one handed swords in the game. As a mage, there may be a better option, though. <span class='standouttext'>Spoiler : </span><span class='spoiler'>You must sacrifice 2 of the holy items to gain one usable item, either a sword, dagger or amulet. There is another powerful one handed sword to be found in the final area of the game, so the amulet can be a good choice even for a warrior.</span> (highlight the text to read)

If you are not having trouble so far, you can continue clearing the third level, if you wish. If you are tired of hack-and-slash and want to continue the main quest, or others, then you can leave and optionally return later.