Using deep 21 cm Hi data from the Green Bank Telescope we have detected an greater than or similar to 18.3 kpc long gaseous extension associated with the starbursting dwarf galaxy IC 10. The newly found feature stretches 1 degrees.3 to the northwest and has a large radial velocity gradient reaching to similar to 65 km s(-1) lower than the IC 10 systemic velocity. A region of higher column density at the end of the extension that possesses a coherent velocity gradient (similar to 10 km s(-1) across similar to 26') transverse to the extension suggests rotation and may be a satellite galaxy of IC 10. The Hi mass of IC 10 is 9.5 x 10(7) (d/805 kpc)(2) M-circle dot and the mass of the new extension is 7.1 x 10(5) (d/805 kpc)(2) M-circle dot. An IC 10-M31 orbit using known radial velocity and proper motion values for IC 10 show that the Hi extension is inconsistent with the trailing portion of the orbit so that an M31-tidal or ram pressure origin seems unlikely. We argue that the most plausible explanation for the new feature is that it is the result of a recent interaction (and possible late merger) with another dwarf galaxy. This interaction could not only have triggered the origin of the recent starburst in IC 10, but could also explain the existence of previously found counter-rotating Hi gas in the periphery of the IC 10 which was interpreted as originating from primordial gas infall.