Be strong. She wants to go -- good. You can't stop her. It's morally honest and clear: she is leaving the family.
You don't need to lie to your kids. Don't bad-mouth mommy. But don't sugar-coat it with, "Mommy needs to be happy." Tell them the truth. "Mommy right now doesn't want to live with Daddy."
Talk to a lawyer and protect yourself in two ways:
1. Custody
2. Finances.
Don't be adversarial with your wife -- lawyers love to shed blood.
The space might do you good. Give you a chance to GAL with some peace.