This is the work of a Viennese art group called Gelatin
their page about the item includes a doc file with more key details.
The bunny is 200 feet long -- a toy rabbit "knitted by dozens of grannies out of pink wool". The toy is expected to stay there, on the side of this 5,000 foot high mountain (Colletto Fava in northern Italy's Piedmont region) for 20 years, until 2025.
Gelatin says it was "knitted by dozens of grannies out of pink wool".
Group member Wolfgang Gantner said: "It's supposed to make you feel small, like Gulliver. You walk around it and you can't help but smile."
The artist statement in full:
Rabbit
The things one finds wandering in a landscape: familiar things and utterly unknown, like a flower one has never seen before, or, as Columbus discovered, an inexplicable continent;
and then, behind a hill, as if knitted by giant grandmothers, lies this vast rabbit, to make you feel as small as a daisy.
The toilet-paper-pink creature lies on its back: a rabbit-mountain like Gulliver in Lilliput. Happy you feel as you climb up along its ears, almost falling into its cavernous mouth, to the belly-summit and look out over the pink woolen landscape of the rabbitís body, a country dropped from the sky;
ears and limbs sneaking into the distance; from its side flowing heart, liver and intestines.
Happily in love you step down the decaying corpse, through the wound, now small like a maggot, over woolen kidney and bowel.
Happy you leave like the larva that gets its wings from an innocent carcass at the roadside.
Such is the happiness which made this rabbit.
i love the rabbit the rabbit loves me.
They expect hikers to find it, climb it, lie on it.
But unlike us, climbers at eye level will take their time making the ironic discovery... that the rabbit is figuratively dead. It's all warm and fuzzy until you realize that the beast's open mouth of horror, its odd configuration, its organs by its side... it has fallen out of the sky to its death.