The candidate rejection letter announces the candidate that you have not selected him for the position.
Getting a rejection letter is always disappointing.  
As an employer, you shouldn’t provide reasons or details about your decision; however you absolutely don’t want to hurt this candidate feeling.

This article provides samples of employer job rejection letters to an applicant.

If you come to a conclusion that the applicant doesn’t fit the position, you will want to send him the post interview rejection letter right after an interview or after completing the interviewing/application process.   
Therefore, the best way is getting strait to the point writing to the candidate that you haven’t selected him.
It would be wise to add some appreciation words on how you impressed by his skills – these may encourage him to continue his job search without having unwanted bad feelings about your company.   
You may also thank the candidate for his or her time interviewing for the job in your company.

Sample Employer Rejection Letters – Template for Post Interview

Here are two samples of rejection letters after the job interview:  
Please edit according to you needs.

1st Sample:
Dear “candidate Name”
Thank you for taking the time for applying to a position “name of the position”.  We appreciate your professional experience and skills and enjoyed interviewing you for the position.
Unfortunately, we are not able to select you for this job position at this time, however we are going to save your contact details and resume for the next job opportunities.
Please do not hesitate to apply for other open positions in our company.

We wish you success with your job search and in your professional career.
Thank you for your interest in our company.
Best Regards,
HR department
Signature

2nd Sample rejection letter:
Dear “candidate Name”
Thank you for your time interviewing to “job position” in our company.
We wish we could hire you for the position, but after carefully evaluating your profile, we have decided against offering you this position.

Our interview team was impressed by your experience and the values you may bring to our company, therefore please feel free to apply for other positions in our company.
Best Regards,
Human resources department
Signature