We report the observation of a new type of columnar liquid crystal phase, which is formed by thin hard colloidal disks in a dense suspension. High-resolution small-angle x-ray diffraction reveals a combination of long-range bond-orientational order and short-range translational order between the columns, the hallmark of the hexatic phase. Our results imply that geometric frustration related to the size polydispersity of the particles destroys long-range translational order and therefore promotes the formation of this novel phase.