A Green Potion is a special item that is found in the game, Paper Mario: The Thousand-Year Door.
The special item is something left over from the X-Naut lab technicians that Princess Peach used, with three other potions under TEC-XX's advice to make herself invisible to sneak into Grodus's room to steal a data disk for info that TEC-XX required.
The Green Potion also returned Peach to her normal, non-invisible state.