Most Helpful Girl
You need to talk to her about it. Most likely she will be hurt no matter what you do, but it's important to be honest with her.
Most Helpful Guy
Possibly it will hurt her less if the reason is that you're homosexual, as thats totally internal and not relative to her desirability. You could even say she was so desirable that even as a gay guy, you fell for her, but now its high time to be honest with yourself and those (her) you care about.