an ultimatum is ... difficult. He will never forget that you made him choose between his mother and you. He -may- understand it, he might even agree with you but it will leave a mark.
But you are being absolutely reasonable. At this point, I think you have to look at all possible outcomes for the future. 1) things carrying on as they are 2) him backing off from his mother 3) him choosing his mother over you and the children and you gong separate ways.
Then have the conversation laying out the three options with him ... calmly as you can.
In your (very tricky) situation I think you have to hope for the best, but pragmatically prepare for the worst. I think it would be best to mentally prepare for separate lives. If he chooses to try to change his behaviour, give it a certain amount of time; he may say each night that he just has to be there for his mother, and you'll find that he's promised to change but doesn't. His mother will go absolutely apeshit crazy if she feels him pulling away and it might not be possible for him to resist that. You may need to be prepared to give him a great deal of emotional support ... If you're willing/able to. If his foolish behaviour has already drained your reserves dry, then it'll be too late (and fwiw I think any adult man who's a father of 4 bloody well knows that his priority should be his kids not his parents, if pushed to make the final decision).
If you do prepare for the worst, you're holding this conversation from a position of strength, knowing you and the children can survive. That will be very, very helpful.
If -if- at that point he decides to change his behaviour, that is his decision and presumably one you'd welcome. But it does avoid the outright black/white ultimatum. You've clearly been pushed to the absolute limit and I don't think it's any bad thing for you to face full-on the idea of living without him.
Much sympathy for you both. A highly engulfing mother is a blight on his life and has been for many years; and you married a man expecting a marriage, not to be the house care-taker while he tends to his highly selfish mother.