Come to terms with your own gayness before disclosing to children. This is crucial. The father who feels negatively about his homosexuality or is ashamed of it is much more likely to have children who also react negatively. The father must create a setting of acceptance by first accepting himself. If he tells his children when he is ready and comfortable, it is likely to be a positive experience for everyone.
Children are never too young to be told.
They will absorb only as much as they are capable of understanding. Use words appropriate to the age of the child. Details may be added as they grow older. Discuss it with children before they know or suspect. When children discover their father's sexual orientation from someone other than the father, they often are upset that their father did not trust them sufficiently to share the information with them.