The first step is to check whether this guy is worth losing your friend over. This is because it is a situation where you will easily lose your friendship with your friend the moment she realizes. Secondly, figure out if what you feel for him is love or lust. Next, list all the things that you like him for including his cons. if all this does not meet your expectations, walk away quietly to save your friendship. If you feel that you two might become an item talk it out with your friend maturely.
I had the same exact problem with my friend. Tell her how you feel about this guy and she'll probably do the same. But make sure that you make some rules about what you can and cannot do with this guy,or just let it be fair game and whoever get him gets him. The guy i liked, liked me back, i told my friend that and she understood. But really make sure you like the guy and that you could work out before informing your friend about the details because it may not end up well(in my case it didnt)and you may regret telling your friend all that stuff. And make sure your friend gets over the guy before you get involved with him because my friend ended up DATING the guy we liked.