You need to get the "Boomerang" from the Great Fairy Fountain in the Forest Haven.
1. Find the Great Fairy Fountain: It's located in the Forest Haven, on the island with the large, tree-like structure.
2. Collect 100 Rupees: You can earn these by fighting enemies, completing quests, or opening treasure chests.
3. Talk to the Great Fairy: Offer the 100 Rupees to the Great Fairy, and she will reward you with the Boomerang.
4. Return to the stone: Once you have the Boomerang, you can use it to break the stone on Outset Island by aiming and throwing it at the stone multiple times. It takes several hits to break it completely.
Let me know if you have any other questions!