What your employee is asking for is the Relieving Letter. There are many templates available in this community. What you have to make sure of is the content, explaining when the employee joined and when he was released or his Last Date of Working. You will have to mention that he has been relieved of all his responsibilities and all accounts have been settled.
This is a must for the employee; however, you can combine it with the Experience Certificate. It often mentions the role that the employee delivered and the changes in designation during his tenure. You may include an acknowledgment of his excellent service, but that's your prerogative. Finally, declare that he has been relieved of all responsibilities and services.
Long story short, an Experience Letter can double up as a Relieving Document, curtailing the administrative activities at your end. The choice is yours.
Hope that answers your question.