This is different from Google's translation tool -- this opt-in service is powered by Microsoft Bing and works on individual posts on Facebook Pages, including comments. For example, if you're an English speaker reading a Facebook public Page and encounter a comment in Spanish, you'll see a Translate button next to it, letting you click to see it translated into a pop-out window in English.
For even better accuracy, the Translate feature lets bilingual users enter a human (and often more accurate) translation in that pop-out window. If enough other users vote positively on the accuracy of a human translation, it will replace the one from Bing each time the Translate button is clicked. The human translations can be managed by page administrators using a "manage translations" link underneath posts on pages they manage.
Facebook Journalist Program Manager (and former Mashable community manager) Vadim Lavrusik says the new feature works now on Facebook Pages, but not on Facebook Profiles yet. According to Ampercent, if you're a page administrator and want to enable this feature for your multi-lingual users, go to "Your Settings" and click "Allow translations from Admin, community and machine translators."