  We announce the discovery of the Aquarius~2 dwarf galaxy, a new distant
satellite of the Milky Way, detected on the fringes of the VST ATLAS and the
SDSS surveys. The object was originally identified as an overdensity of Red
Giant Branch stars, but chosen for subsequent follow-up based on the presence
of a strong Blue Horizontal Branch, which was also used to measure its distance
of $\sim 110$ kpc. Using deeper imaging from the IMACS camera on the 6.5m Baade
and spectroscopy with DEIMOS on Keck, we measured the satellite's half-light
radius $5.1\pm 0.8$ arcmin, or $\sim 160$ pc at this distance, and its stellar
velocity dispersion of $5.4^{+3.4}_{-0.9}$ km s$^{-1}$. With $\mu=30.2$ mag
arcsec$^{-2}$ and $M_V=-4.36$, the new satellite lies close to two important
detection limits: one in surface brightness; and one in luminosity at a given
distance, thereby making Aquarius~2 one of the hardest dwarfs to find.
