I am moving a electric heater thermostat and need to extend the exhisting wiring. The exhisting wire is 12/2 can I extend with 10/2 wire? Is this safe since I am going from a smaller gu wire to a larger grade wire

There is no problem, as long as the breaker setting is rated for the smallest wire in the circuit, in this case, 20 amps.

The other issue to be careful of is splicing. Be sure to make a solid connection. #10 wire is difficult to splice. A loose connection in a heater circuit will damage the splice and create more problems.

Be sure to not exceed the allowed volume of wire in a junction box, as #10 wire does need more space.