replace vars(): sed error code example

Example 1: sed replace with variable

Just concatenate var '"$var"' to replace values string in sed command:
$ sed -i 's/string_to_replace/'"$var"'/g' file_to_replace.txt

Example 2: sed replace with variable

Use double quotes to make the shell expand variables while preserving whitespace:

sed -i "s/$var1/ZZ/g" "$file"