Try to get inside your DW's head right now. Do a bit of reading too about the effect an affair has on an individual and then in turn, their relationship.
Your wife is having an affair with another man. It doesn't matter whether she's had sex with him yet or not; she wants to. When this started, she entered into a headspace that is as close to insanity as it comes. She is addicted to not just this man, but the fact that he finds her desirable and worthwhile. She is as addicted to the affair itself and the thrills it gives her as she is to him.
But she's been socialised all her life to believe that women don't have affairs unless there's something drastically wrong in their relationships and that women don't have affairs just because they fancy a sexual adventure with someone else. Maybe even that women can't have sex without love or strong feelings for a man.
Now none of that's true at all, but because that social discourse is so relentless, as soon as she started to enjoy this flirtation and took it further, she probably convinced herself that it must mean she was secretly unhappy with you and that she has stronger feelings for her work colleague than mere lust.
So instead of realising this is just a crush brought on by returning to work and feeling like a woman in her own right for the first time in ages, wearing clothes not covered in baby sick, she has talked herself into thinking your marriage is doomed and that the most ethical thing to do is to end things with you. Oh, and that she must be deeply in love with the OM......
No amount of pleading and counselling is going to alter the course she is on right now. She doesn't want to be talked out of this second relationship.
The only strategy that has ever been known to work in this situation (for both parties) is loss.
So you tell her that you've got too much self-respect to stay with a woman who doesn't love you and who is lusting after someone else. That you want a clean break and to agree on living separately from now on - sharing residence with the children. That you'll be going to see a solicitor because you've found out that an emotional affair constitutes ample grounds for divorce (it does, incidentally).
And then you withdraw completely. You take back control of the situation and show her what life will be without you in it. You also tell everyone you've parted and why.
In private, with friends and family and on this thread, cry as much as you need to and speak about your sadness. But don't do that with her.
Only if she thinks she's lost you for good, will she stop this course she's set on. Even then, she might not alter that course straightaway. But I promise you, she will never stop what she is doing as long as she thinks she's got a fall-back position and that you'll be waiting for her when this all goes belly-up, as of course it will.