Release a Vassal is a button with a white dove. Essentially, when you press it, you can select a part of your annexed territory and either establish a nation again where you once invaded as a vassal or form an entirely new nation. When you do either of those, the nation will become a vassal.
This is a good button because you immediately get good relations with the vassal, so there is no fear of independence. Plus, vassal taxes can pay for war expenses, and you can very easily demand annexation afterward.