I actually think it's great that you have allowed your son the security of sleeping with his parents. But yes, it seems like it's time for him to move out!
Our son co-slept with us until about 18 months. Then he would let me nurse him to sleep and lay him down in his toddler bed asleep, and he would stay there most of the night. But right before his 2nd birthday it started becoming very difficult to nurse him to sleep because he was so easily distracted. We had tried CIO at one point and it was traumatic for all of us. So, we used an idea that I got from Dare to Discipline by James Dobson. Basically, his theory is that a child would never give up something he enjoys so much without some motivation. He suggested turning it into a game with rewards. For us, it was raisins because he loves them so much. We would lay him down in his bed and tell him that if he could be good and quiet for 1 minute, he could have a raisin. That was easy enough and he was very proud of himself when he did it. Slowly I would wait longer and longer until the next raisin, until he was laying there for 10 or 15 minutes without making a peep. If he started crying, I would come to the door and remind him that he had to be quiet to get the treat. The first night he didn't quite fall asleep by himself, I still had to nurse him. But by the 2nd or 3rd night, he actually fell asleep waiting for his next treat!
Now, my son is an extremely attached little guy, completely addicted to nursing and loved sleeping in our bed, and I was shocked at how easy this method made it. No crying, no trauma, just a fun game at bedtime. He's 27 months old now and climbs right into bed every night, we sing a song, tuck him in, and kiss him goodnight. Sometimes he still asks for a raisin but we only have to bring him one, then it's right to sleep.
Good luck with your transition. I would encourage you to make it gentle on the little guy, because there's no way for him to understand why he suddenly can't sleep with you anymore.