I'm a huge believer in complete and utter honesty in a relationship, so you can probably guess what my advice would be.
I understand full well that you have come to realize that you have a great guy and want to keep him, but.. well, "you want to keep him" - in the dark. Not good.
As much as it hurts and as much as you may lose, *you* did the action, now it is time to face the consequences. Two choices. Lie. Truth.
Do you *really* want a relationship built on a lie? Is it fair to you *OR* to him? The woman he is in love with is hiding something of this magnitude from him. Don't you think he deserves to know what he's actually dealing with in the relationship? Don't you respect him enough to let him make his own decision based on the truth and not some false fantasy charade?
Sorry. I honestly do feel for you and really do understand how much you want to keep the relationship, but at what cost? Lying is *NEVER* good in a relationship, no matter what any movies or magazines or talkshows say. It really isn't.
You do not have the right to keep him in the dark in his own relationship only because you want things to be your way. Sorry if you feel that is harsh, but it is true.
He has rights in this relationship, too. Relationships are by their very nature two way streets.
Not telling him to protect your ideal and your feelings and your dreams is not fair, and deep down you know it and you don't believe it is right or you would have never posted it for advice.
Besides, if he *really* loves you, he'll forgive you. You don't have the right to make his decison for him, though, and by not telling him, you are effectively denying him his right to make his own decisions about his life.
However, it *is* also your life and your decision. Good luck with whatever decision you make.