Your layer palette should look like the sample below.
Note that there are two thumbnail in the Black & White 1 layer. The blank thumbnail on the right is layer masking. If you paint color on the layer masking, it will remove the effect of current layer affecting the lower layer, the dark the value, the higher the cancel effect.
We want to use the layer mask to remove part of the black and white effect so that the color layer beneath it can be partially show through. Make sure the 'Black & White 1' layer are selected. Select the Gradient Tool from tool palette.
Make sure the gradient tool has a smooth transition from black to white. Edit your gradient by click on this tool on the upper toolbar . Following dialog will appear:
Follow the setting above and click OK.
Make sure the 'Black & White 1' layer are still selected. Use the gradient tool to fill the layer from upper right to lower left. It will create the following effect:
The gradient will remove part of the black and white layer and allow the color layer beneath shown through. Download the complete project here.
For the simplicity we will be creating our black and white image from Black & White adjustment layer (you can find more advance Black and White image tutorial on this site), click on the Add Adjustment layer button and select 'Black & White...'.
You can manually adjust the amount of each channel contribute to the Black and white result or simply use the Preset. Click OK when you happy with the setting.
In this tutorial we will be creating transition effect from color to black and white image with Black and White adjustment layer and layer masking. We will be using the image on the left to do our tutorial. Download the project file here.