Telling my department about switching to a new PhD program - moral dilemma
What's the best way to approach this and tell the department about this?

There is no magic incantation; the approach will be the same as for any other job. Tell them as soon as possible, thank them for all they've done for you, and emphasize that your decision is based on your evolving interests rather than any shortcomings of the individuals involved. See also this post.

I'm even wondering if what I'm doing is so unethical, perhaps I should stay. Is this so unethical?

There is nothing unethical about it; grad programs know that a fraction of students will choose to leave due to circumstances beyond the program's control. Losing a good student after investing effort is disappointing, but it goes with the territory. You should not let such considerations hold you back from doing what you need to do.

perhaps I should stay

You didn't really ask for advice on the decision itself, but I do want to say that many students fixate too much on the exact subject they're studying. The idea of a PhD, however, is to give you a foundation from which you can continue to learn throughout your career. Now if field A is art and field B is physics, yeah, you will have to switch; no way your art foundation will be that broad. But for most adjacent fields/subfields, either PhD should give an adequate foundation for your future work.
Beyond that, staying seems to have three key advantages:

Your department is &quot;encouraging&quot; you to pursue B as an interdisciplinary subject. From the outside at least, this seems like a &quot;best of both worlds&quot; situation.
You don't have to restart you program from the beginning, which will save you an entire year
You get to stay in your current supportive environment with a great advisor. Grad programs are a bit of a dice roll; rolling again introduces some uncertainty.

So I certainly recommend that you consider staying on. But at the same time, if you're not really passionate about A, you will not be successful in A, and it's certainly better to make the jump now rather than three years from now. So it is a dilemma, and one only you can unravel; best of luck.