How to explain a step-sister to my son?

Just tell him that he can have sister/brother from other families and when two people get married and they have their own kids they become their sibiling

^ this.
and congratulations!

if you are worried about it being rough with a 1 year old, then truthfully don't get married,, I am not being snarky, but don't have feelings for one as a "step" and one as blood.
BEFORE you all tie the knot, have the 2 of them spend alot of time together, if this is an issue for you kid (ie new dad,new sibling) then don't get married.

I'm assuming they've met? It likely won't be a huge deal for him right now. I was 8 when my mom remarried and I have 2 step brothers, they were 4 and 6, my bio brother was 5 - we really didn't think any thing of it other than "cool, more people to play with!" Just expect some bumps along the way, it happens. I read recently it takes around 6 years for a blended family to "gel" completely. From experience both as a child and a mom I would say that's about right.

Is he sole parent or does he have joint custody of his dd? If he has sole custody, she is young enough to not know any better and you WILL be her mother, step or not. Your son is also young enough that he will not even think of her as a step but a true sister. She won't know any better and will think of him as a true brother. Congrats to both of you.

Rather than emphasize the step-sibling relationship, why not "explain" who she is in relation to her father?

I'm not sure where you're at in your process. He may have met your new fiance but not his daughter, yet. Explaining who she is would seem to me to be a matter of explaining that she is this man's little girl.

If your son knows her but is trying to understand the "step sister" thing (who she will be in the family) then emphasize that you plan to marry and you will make a family together. You'll be adding this person as a husband & his daughter will be part of the new family you are making, just like your son is. If his visitation is fairly limited and the little girl won't be as present in your household as your son is, then that may be the thing that needs contextualizing--how she spends time with her mother, too.

Seems like him having a firm grasp of this child as your fiance's daughter is the place to start.

DH is the baby of his family. When his parents married they each had 2 or 3 children already. His dad sat them all down and told them there were no steps or halves in their family, they were brothers and sisters, end of story. 40 years later, they all still see it that way. He'll know what you tell him.

just let him know other people have other children and we become one family.