Full Idea
There is a kind of poetry whose essence lies in the relation between the ideal and the real, and which therefore, by analogy with philosophical jargon, should be called transcendental poetry.
Gist of Idea
Poetry is transcendental when it connects the ideal to the real
Source
Friedrich Schlegel (works [1798], Vol 2 p.204), quoted by Ernst Behler - Early German Romanticism p.78
Book Reference
'A Companion to Continental Philosophy', ed/tr. Critchley,S/Schroeder,W [Blackwell 1999], p.78
A Reaction
I think the basic idea is that the imaginative creation of poetry has the power to bridge the gap between the transcendental (presupposed) ideal in Fichte, and nature (which Fichte seems to have excluded from his system).