Assuming both of these people are close friends, about equal in friendship, then I think his confiding his affair in you to be indicative of an attitude that the woman is inherently less than. I can’t imagine why he would tell you knowing that you are friends with his wife too unless he just assumes all men think like he does.
I would of told him this flat out, right away. His wife has a right to know, just as he would have a right to know if she were sleeping around on him. If she gets infected with a disease that he contracts while having an affair, then I would worry about my own culpability in inflicting that harm, since she probably would not have sex with her cheating husband if she knows.
The other thing I find disturbing is how he wants to keep it secret for now to see if this other woman will work out, and then divorce his wife if it does. Justice demands that his wife know this.
But obviously that’s going to drag you into this world of hurt he created. I can see why a person would not want anything to do with this debacle. But if my friend were being victimized by this, I would be a friend and inform her, just as I would want to be informed if it happened to me.