Advice I can give you (as I was in exact same situation last year) is to stay calm, don't beg, don't chase, just respect his decision, hold your dignity and walk away. He's confused alright but he's confused about the best way to handle this so he can get himself out of this situation as easily as possible with you.
His head has been turned and I'll bet there is another woman. He won't tell you as he probably does love you and doesn't want to hurt your feelings but "he's not in love with you". He's also not telling you the honest truth as this is an easier way out for him - no drama, no dragging this out, you can't really argue with someone when they say I don't fancy you!. In a nutshell he wants to have sex and be with someone else. This is no reflection on you but you need to start fully giving all that you gave to him to yourself. Love yourself more, you don't deserve this s**t. Focus on yourself.
I was told the exact same story and then I got well I need space, I stupidly believed this as we lived together and then I got told oh I've met someone - just a month later. We were still friends as that's what he asked for and I thought ok there is still a way back for us. He was still calling round me making him dinner, listening to his problems, a place he could crash when the OW was in work. He lived in a shared rented flat. When I finally realised what a mug I was, I stopped all contact and blocked. He asked to come back 4 months later. It was the dishonesty I couldn't forget and I suspect he met her when I was at home looking at my really ill father months before we actually broke up.
If he mention's about being friends say no thank you, I have enough friends and block, delete and move on. It's really difficult but know your worth and when you look back on this you can say yeah f**k that I held my head high.