We have performed angle-resolved photoemission spectroscopy on HfSiS, which has been predicted to be a topological line-node semimetal with square Si lattice. We found a quasi-two-dimensional Fermi surface hosting bulk nodal lines, alongside the surface states at the Brillouin-zone corner exhibiting a sizable Rashba splitting and band-mass renormalization due to many-body interactions. Most notably, we discovered an unexpected Dirac-like dispersion extending one dimensionally in k space-the Dirac-node arc-near the bulk node at the zone diagonal. These novel Dirac states reside on the surface and could be related to hybridizations of bulk states, but currently we have no explanation for its origin. This discovery poses an intriguing challenge to the theoretical understanding of topological line-node semimetals.