Abdullah bin Muhayriz narrated: I asked Sayyiduna Fadalah bin Ubayd (may Allah be pleased with him), who was among those who took part in the Pledge of Ridwan (the pledge under the tree): Is cutting off the thief's hand and hanging it around his neck part of the Sunnah? He said: A thief was brought to the Messenger of Allah (peace and blessings be upon him), and he gave the order and his hand was cut off; then he gave the order and it was hung around his neck.
Hadith Referenceالمعجم الكبير للطبراني / باب الفاء / 15860