"There's a special passage between a woman's legs for the baby to come out."
This has always worked for me. (Of course, we label body parts correctly, but girls can be confused about the actual difference between their urethra and vagina, so I rarely explain it that way. ) When I was a nanny, I did get the follow-up questions from kids about "do you poop it out?" With my own son, when he was four, the question was "Can I see on you where I came out ?" Because he was so direct, and because I didn't feel a detailed gyn show from me was appropriate, we looked at some very low-key pictures of childbirth from Sheila Kitzinger's "Guide to Pregnancy and Childbirth". (By low key, I mean that the mother in the pictures was not upset, nor were the pictures bloody). This is more than what most kids ask at this age, but I figured that since he was 'open' to information, this would be one way to normalize childbirth for him before he was old enough to be embarrassed about it. He asked one other time a few months ago, to see the pictures. No huge questions, and he wasn't upset about the information.
It's great that you want to be direct. A good book can help...check your local library and find something age-appropriate for your little guy that you are comfortable with. Good luck!