docs: add templatestring

website/docs/language/functions/templatefile.mdx

@@ -148,3 +148,4 @@ For more information, see the main documentation for
 
 * [`file`](/terraform/language/functions/file) reads a file from disk and returns its literal contents
   without any template interpretation.
+* [`templatestring`](/terraform/language/functions/templatestring) takes a simple reference to a string value containing the template and renders its content.

website/docs/language/functions/templatestring.mdx

@@ -0,0 +1,68 @@
+---
+page_title: templatestring - Functions - Configuration Language
+description: |-
+  The templatestring function takes a string from elsewhere in the module and renders its content as a template using a supplied set of template variables.
+---
+
+# `templatestring` Function
+
+-> **Note:** The `templatestring` function is intended for advanced use cases, and is not the same as a [string template expression](/terraform/language/expressions/strings#string-templates). To render a template from a file, use the [`templatefile` function](/terraform/language/functions/templatefile).
+
+`templatestring` reads the file at the given path and renders its content
+as a template using a supplied set of template variables.
+
+```hcl
+templatefile(ref, vars)
+```
+
+The first parameter must be a simple reference to string value containing the template: for example, `data.aws_s3_object.example.body` or `local.inline_template`.
+
+It is ***not** valid to supply the template expression directly as the first argument:
+
+```hcl
+# The following is not allowed
+templatestring("Hello, $${name}", {
+  name = var.name
+})
+```
+
+Instead of the above, you should instead use a string template expression:
+
+```hcl
+"Hello, ${var.name}"
+```
+
+The `templatestring` function is needed only when the template is available as a named object in the current module.
+
+The template syntax is the same as for
+[string templates](/terraform/language/expressions/strings#string-templates)
+in the main Terraform language, including interpolation sequences delimited with
+`${` ... `}`. 
+
+Strings in the Terraform language are sequences of Unicode characters, so
+this function will interpret the file contents as UTF-8 encoded text and
+return the resulting Unicode characters. If the template contains invalid UTF-8
+sequences then this function will produce an error.
+
+## Example
+
+The following example retrieves a template from S3 and dynamically renders it:
+
+```hcl
+data "aws_s3_object" "example" {
+  bucket = "example-example"
+  key    = "example.tmpl"
+}
+
+output "example" {
+  value = templatestring(data.aws_s3_object.example.body, {
+    name = var.name
+  })
+}
+```
+
+For more examples of how to use templates, please see the documentation for the [`templatefile`](/terraform/language/functions/templatefile#Examples) function.
+
+## Related Functions
+
+* [`templatefile`](/terraform/language/functions/templatefile) reads a file from disk and renders its content as a template.