Wow. So sorry to hear that you have had to go through with this.

What made your husband decide to tell you?

You're right - completely cutting contact with this so called "best friend" is the best thing to do. Your husband should do the same - sever all ties completely off facebook / text / phone / email - block ... block ... block.

Does her husband know she was unfaithful?

I think it's going to pose a lot of challenges moving forward with regards to trust in the relationship. If you choose to stay with him, I'd recommend that the two of you actively seek couples counselling, or at very least, you see a counsellor to help you work through your feelings.