Hello Vicki and welcome.
( I will use male pronouns as you have not said whether your Father wishes to be addressed as She or He)
As a Trans parent of a Trans child I have experienced things from both sides of the fence, and can sympathise with your situation.
The main thing to hold on to is that your Father is still the same person, but is undergoing some major changes. None of them are life threatening in the way that finding he had cancer would have been, so you will not lose him, but I would guess he is scared of losing his family.
He obviously trusts and loves you enough to tell you something that has probably been eating away at him for years, if not all his life. For too many of us the fear of being rejected by our family is such that they would rather live a miserable life, or end it altogether in despair. You have done a great thing by sticking with your Father, even if you don't understand what is happening all that well. There is a lot of information here at Susan's, and also in the community generally nowadays so you can get assistance in understanding the situation from a variety of sources.
Nothing happens in a hurry, and four Dad will be taking things slowly anyway as this is all new to him. Basically you are going to be able to see the real person for the first time, and generally we are a lot nicer to be around. He will still be able to show his masculine side if needed, but you will have another parent who understands you the way that any other woman can, but men rarely do.
Basically just love him for who he is, not what he looks like down the track.
Karen.
PS As I have said to anyone else dealing with your situation, you can PM me anytime.