X-ray pump/X-ray probe applications are made possible at X-ray Free Electron Laser (XFEL) facilities by generating two X-ray pulses with different wavelengths and controllable temporal delay. In order to enable this capability at the European XFEL, an upgrade project to equip the soft X-ray SASE3 beamline with a magnetic chicane is underway. In the present paper we describe the status of the project, its scientific focus and expected performance, including start-to-end simulations of the photon beam transport up to the sample, as well as recent experimental results demonstrating two-color lasing at photon energies of 805 eV + 835 eV and 910 eV + 950 eV. Additionally, we discuss methods to analyze the spectral properties and the intensity of the generated radiation to provide on-line diagnostics for future user experiments.