OP, This is your responsibility now.
you can’t decide anything for either of them, but you can read your Son the riot act.
He needs to very clearly be told that he is 16 and she is not, and that having sex with her is not only illegal, it is considered to be statutory rape, and that if he has sex with her he could be charged, prosecuted, and end up with a criminal record.
The reality is that that is quite rare, but while the possibility exists this is what needs to be said to him.
I would be telling him that this relationship is now essentially over. You won’t be giving him permission to go to this girl’s house or to have Her over to yours. He won’t be leaving school at 16 and if he does he can leave home and get a job.
If he’s adult enough to have a baby and live with some girl then he’s adult enough to live on his own and get a job.
Harsh? Yes, but at 16 he’s not an adult, and some 16 year olds need to realise that.
I would hope that the girl’s parents would read her the riot act as wel, not because of your DS but because I would want my 15 year old to be well aware of what she was potentially getting into by getting pregnant. And I certainly wouldn’t have been congratulating her, but that’s for them to work out. You need to concentrate on your DS here.