  The production of $\Upsilon$(2S) and $\Upsilon$(3S) mesons in lead-lead
(PbPb) and proton-proton (pp) collisions is studied in their dimuon decay
channel using the CMS detector at the LHC. The $\Upsilon$(3S) meson is observed
for the first time in PbPb collisions, with a significance above five standard
deviations. The ratios of yields measured in PbPb and pp collisions are
reported for both the $\Upsilon$(2S) and $\Upsilon$(3S) mesons, as functions of
transverse momentum and PbPb collision centrality. These ratios, when
appropriately scaled, are significantly less than unity, indicating a
suppression of $\Upsilon$ yields in PbPb collisions. This suppression increases
from peripheral to central PbPb collisions. Furthermore, the suppression is
stronger for $\Upsilon$(3S) mesons compared to $\Upsilon$(2S) mesons, extending
the pattern of sequential suppression of quarkonium states in nuclear
collisions previously seen for the $\psi$/J, $\psi$(2S), $\Upsilon$(1S), and
$\Upsilon$(2S) mesons.
