diff --git a/template/interpolate/funcs.go b/template/interpolate/funcs.go
index 03b9a8351..5b67e5afb 100644
--- a/template/interpolate/funcs.go
+++ b/template/interpolate/funcs.go
@@ -257,7 +257,7 @@ func funcGenVault(ctx *Context) interface{} {
 }
 
 func funcGenSed(ctx *Context) interface{} {
-	return func(inputString string, expression string) (string, error) {
+	return func(expression string, inputString string) (string, error) {
 		engine, err := sed.New(strings.NewReader(expression))
 
 		if err != nil {
@@ -266,6 +266,14 @@ func funcGenSed(ctx *Context) interface{} {
 
 		result, err := engine.RunString(inputString)
 
+		if err != nil{
+			return "", err
+		}
+
+		// The sed library adds a \n to all processed strings.
+		resultLength := len(result)
+		result = result[:resultLength-1]
+
 		return result, err
 	}
 }
diff --git a/template/interpolate/funcs_test.go b/template/interpolate/funcs_test.go
index 99e14bd49..b624a160f 100644
--- a/template/interpolate/funcs_test.go
+++ b/template/interpolate/funcs_test.go
@@ -322,12 +322,12 @@ func TestFuncSed(t *testing.T) {
 		Output string
 	}{
 		{
-			`{{sed "hello" "s|hello|world|"}}`,
+			`{{sed "s|hello|world|" "hello"}}`,
 			`world`,
 		},
 
 		{
-			`{{sed "hello" "s|foo|bar|"}}`,
+			`{{sed "s|foo|bar|" "hello"}}`,
 			`hello`,
 		},