  We report the discovery of Scl-MM-Dw2, a new dwarf galaxy at a projected
separation of $\sim$50 kpc from NGC 253, as part of the PISCeS (Panoramic
Imaging Survey of Centaurus and Sculptor) project. We measure a tip of the red
giant branch distance of $3.12\pm0.30$ Mpc, suggesting that Scl-MM-Dw2 is
likely a satellite of NGC 253. We qualitatively compare the distribution of red
giant branch (RGB) stars in the color-magnitude diagram with theoretical
isochrones and find that it is consistent with an old, $\sim$12 Gyr, and metal
poor, $-2.3<$[Fe/H]$<-1.1$, stellar population. We also detect a small number
of asymptotic giant branch stars consistent with a metal poor $2-3$ Gyr
population in the center of the dwarf. Our non-detection of HI in a deep Green
Bank Telescope spectrum implies a gas fraction $M_{HI}/L_V<0.02$ Msun/Lsun. The
stellar and gaseous properties of Scl-MM-Dw2 suggest that it is a dwarf
spheroidal galaxy. Scl-MM-Dw2 has a luminosity of $M_V=-12.1\pm0.5$ mag and a
half-light radius of $r_h=2.94\pm0.46$ kpc which makes it moderately larger
than dwarf galaxies in the Local Group of the same luminosity. However,
Scl-MM-Dw2 is very elongated ($\epsilon=0.66\pm0.06$) and it has an extremely
low surface brightness ($\mu_{0,V}=26.5\pm0.7$ mag arcsec$^{-2}$). Its
elongation and diffuseness make it an outlier in the ellipticity-luminosity and
surface brightness-luminosity scaling relations. These properties suggest that
this dwarf is being tidally disrupted by NGC 253.
