You know your boy best, so go with your instinct and tell him sooner rather than later.
My mother sat me down when I was 7 and explained the same thing to me - her words were that my dad wasn't my 'real' dad. It was a huge shock to me and, even now, 34 years on, I can still recall it all very clearly, the words she used and how I felt. In those days, being born out of wedlock was still frowned upon and my mother was very wary of our 'secret' getting out. I remember confiding in a friend at school when I was 12, the first person I ever told, and she was shocked that I was a bastard! The nasty bitch, I always was a lousy judge of character! :o
Anyway, sorry as I digress. But thank goodness times have completely changed now and very few people bat an eyelid about parents not being married.
I am no expert, but my advice is for both you and your husband to tell him and his sister together, if you feel that's appropriate. If you prefer to speak to him first, then do so but involve your DD as soon as it is appropriate.
Don't treat this like a secret, or a big deal. Discuss it openly, as a family, with both children present. Give your children time to process the information, react in their own way, and be prepared to answer any questions honestly and openly, in a way that is appropriate for their age to understand.
It will be a big deal for your son, and he may feel unsettled for a period of time afterwards, which might manifest itself in various ways. Make sure you give both the children reasurance that nothing is going to change. Also, not sure how touchy-feely your DH is with the kids, but make sure he is particularly vocal about how much he loves DS, and how he considers DS to BE his 'real' son, etc. You get the gist. Your son will need to know that the man he considers 'Dad' is still 'Dad and loves him just the same as he always has, that nothing has changed.
You and your DH also need to consider about how you want to deal with other people knowing, as your son might ask you if he can tell his friends etc. It's not a big deal obviously but you may feel you prefer to speak to others first, plus let your respective family members know what's happened.
Another option to consider is to first consult a specialist child psychologist for advice and guidance on the best way to tell your children, and dealing with the afterwards, IYKWIM. I've used one and found it to be very helpful.
Best of luck and hope it goes well. And look, you can't possibly do any worse than my Mum, bless her, who told me 'ExpatMummy, you were conceived after Mummy had four nights of passion, but sadly Mummy doesn't know which one it was exactly'! :o