Using GNU sed.
mline="this is\na line\nin multiple\nlines"
sed "s/PATTERN/${mline}/g" <<<"PATTERN here."
this is
a line
in multiple
lines here.
If your input contains / as special character or & which will match as pattern match in sed. Use global Pattern Substitution // to replace/escape all /es and replace back all PATTERNs with \&.
sed "s/PATTERN/${mline//\//\\/}/g; s/PATTERN/\&/" <<<"PATTERN here."
Or either better to use different sed's substation delimiter and escape & again.
sed "s:PATTERN:${mline//&/\\&}:g" <<<"PATTERN here."
And finally if you want it works on actual Enter, first we need to replace all \n with \\n to let them feed to sed as \n. So
Input in multiple lines with actual enter.
mline="th&is is
a line
in mul/tiple
line/s"
The command:
aline="$(sed -z 's:\n:\\n:g;$s:\\n$::' <<<"$mline")
sed "s:PATTERN:${aline//&/\\&}:g" <<<"PATTERN here."
The output is:
th&is is
a line
in mul/tiple
line/s here.
sedas the delimiter for the substitution command need to use a character that is guaranteed to not occur in the pattern nor replacement. One would need to pre-process the string first.