Wait a minute. I think there may be a bit more to this than you realise.
You are pining after someone who is not available to you. You have emotionally checked out of your relationship and are examining your feelings. You feel that there is very little to work on and that you have lost the connection with your dh.
You would be happy to end the relationship and stay on good terms with each other. Ideally, you would have an amicable separation and stay on good terms.
This would allow you to have time on your own, to come to terms with the end of both relationships and to start building a new life where you can freely meet people and honest relationships with them.
Your dh, on the other hand, is asking you to allow him to keep all the comforts of home without, as you say, all the disruption a separation would cause. He wants permission to sleep with other women whilst you are at home looking after his children.
He is not looking at moving on with his life, he just wants sex. He even told you that he wants to keep his options open. The life he is suggesting would be so emotionally damaging to you. One day, you will wonder why you let him treat you like that.
I think a trial separation of at least 3 months would be the best way to gauge how you feel. You can agree that, during that time, you can both see other people if you want to. But the big difference is that you won't have to lie about it or sneak around. You will be free to come and go as you please without having to hide it from anyone.
You will also be able to tell how much you miss him and want him back, if at all. It is a big upheaval, but that's how the end of a relationship is. Best to have a quick clean break than let it struggle on and slowly fall apart.
The only way to make him moving out into a less painful scenario is for you to be genuinely glad that he he's going. That would mean your relationship breaking down to a point that you don't really like each other any more, which I'm sure you don't want.
And that is the worst option for the children too.