Even if you decided to talk to be honest with your child long before they were even conceived, it can be a daunting prospect to broach the topic for the very first time. Your "plan" to wait until your child started asking questions about where babies come from, or where they came from, may not have panned out. Although your kid may notice pregnant women, and know that "babies grow in mommy's tummies" he or she may express little or not interest in discussing the topic further.
This is where buying an attractive storybook for your child, and telling them its a special story you want to share with them, can save the day. Some parents prefer to avoid the words egg and sperm, and simply read books that refer only to "the special lady" (or man) who gave their parents a wonderful gift that enabled them to have their child. Then you can mention the fact that your own family had "a special lady" (or man) who helped them to have you!
When a child gets a little older, however (ages 4-5) its important to give them a little more information about "how babies are made". No mention needs to be made of sexual intercourse but even very young children can grasp the notion that eggs come from women and sperm come from men, and that putting the two together is what makes a baby start to grow. This more concrete information introduces concepts to your child that you can build on later on. It also gives you the opportunity to talk about the very nice lady (or man) who had eggs (or sperm) they didn't need and that the donor wanted to help the family have the child they wanted so much.
I'm a former infertility patient, psychotherapist and author of Unspeakable Losses (WW Norton and HarperCollins).