As your children are so young I would think all they need to know is that mum and dad still love them, but they won't live together anymore and they will see plenty of both of them.
I don't think they need to know anything else. Just make sure you and your wife tell them together and try and put on a united front (as far as possible) so they don't pick up on the likely negativity between you.
We told DD that we were not making each other happy so we thought it was better to have two happy houses rather than one unhappy. We then pointed out the advantages two sets of Christmas and birthday presents. They will be upset, but remind them that you both still live them very much.
My DSs are same age as yours. We told them on Monday night. We told them that daddy is moving to a new house/flat. We did not mention not loving each anymore, thought they were too young and might make them think we don't love them. I had bought a book for the kids called Two Homes (through amazon) and it deals with the idea v simply. The older one is sold on the idea of 2 of everything! The second one, though younger, is more thoughtful and is more upset but almost a week has gone by and they haven't asked many questions other than when they will see daddy's new home. They haven't been over yet as their new furniture comes in the week and we didn't think it will b helpful for them to see an empty room! Best of luck.
Thanks. That wasn't fun, but its done. Best question so far: 'can we have bunk beds?'
But the older one is clever and mature and taking it with heartbreaking positivity - looking fir the bright side almost as though he wants to save our feelings by being happy. We have set a bomb ticking in his head. Sooner or later it will explode.