There aren't many details available yet on this app, but the press release does mention that this app will be compliant with COPPA, and that the app is scheduled to ship on Fuhu’s Nabi Android tablets, including the Nabi Jr., Nabi 2 and Nabi XD, later this Summer. Those tablets will also ship with the regular Nook for Android app.
Details are sketchy at this point, but it looks to me like B&N is expanding upon the work they've put into the Nook HD and HD+. Those tablets are designed with parent and child accounts, with the latter accounts restricted to only a limited access of the web, Nook Store, and content.
Or at least I would hope that the new Nook for Kids Android app will be tied into existing development efforts; that should save it from the fate of B&N's other Nook for Kids app. B&N launched a Nook Kids app for the iPad and iPhone in January 2011 and then stopped updating it in July 2011.
Speaking of which, that's not the only app that B&N appears to have abandoned. While their main iOS and Android apps are getting regular updates, NookStudy, Nook for Mac, and Nook for PC haven't been updated since August 2012, March 2012, and December 2011, respectively. (Also, Nook Video was supposed to have gotten a stand-alone app, but 9 months later it is no where to be found.)
In this day and age those dates aren't evidence of a long development cycle; they're a sign that the apps are no longer under development. Let's hope the Nook for Kids Android app doesn't suffer the same fate.
In recent weeks B&N has extended the sale on Nook HD and Nook HD+, with the 7" Nook HD tablet selling for $130. That deep discount (35%) could be a sign that B&N plans to abandon their hardware and focus on an app strategy.
Given that B&N has also pulled back on app development I am no longer sure that is the case.