In one of the novels it says that the Hidden Blade is unleashed via a button being pushed by flexing a certain muscle on the forearm, but the novels aren't exactly the same as the games. Also, various sources have shown the hidden blade to be extracted by a ring on the finger being pulled, but we never see this mechanism in the games. So, how does the mechanism of the Hidden Blade we see in the games work?
I choose to believe the ring explanation. You can't see it on the in-game models but it's in the concept art and it makes the most sense. Someone even made a working hidden blade using the ring method on youtube.