Employee Who Cannot RTW w/o Restrictions

I have an employee who was on FMLA and has exhausted both it and the extended LOA provision that my company provides. Initially this employee was ready to just "quit" because of  ongoing medical concerns and I offered him FMLA as he has been employed since 1989 with this company and never took a LOA. He took the FMLA, has exhausted it and the LOA, he has not accrued leave and he is on STD. Now the employee wants to RTW but he has restrictions  - per his Dr. cannot lift more than 25lbs and can not sit OR stand for longer than 45 minutes at a time. This discounts him from being able to fulfill his current full time position as it exists. His supervisor cannot create another job for him. He has no clerical or administrative skills to speak kof to create another job for him. His current position was in a manager type capacity but it involved a lot of physical exertion. He does not want part-time which I offered him.

 My question is can I terminate this employee or allow him to resign as I cannot provide him with any reasonable accommodations to his Dr's. RTW restrictions?

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