  We report a measurement of the $B^0\rightarrow\psi(2S)\pi^0$ branching
fraction based on the full $\Upsilon(4S)$ data set of $772\times10^{6}$
$B\bar{B}$ pairs collected by the Belle detector at the KEKB asymmetric-energy
$e^+e^-$ collider. We obtain $B(B^0\rightarrow\psi(2S)\pi^0) =
(1.17\pm0.17\text{(stat)}\pm0.08\text{(syst)})\times10^{-5}$. The result has a
significance of 7.2 standard deviations and is the first observation of the
decay $B^0\rightarrow\psi(2S)\pi^0$.
