Let's see... my Concise Oxford Dictionary says about the first meaning it lists: "(often followed by 'into') express the sense of a word, sentence, speech, book etc. in aanother language." In the sense of transformation (he translated water into wine) it says '"followed by 'into'" without 'often'.

The more American-centered Webster's New Encyclopedic Dictionary does not clearly state an opinion, but has an example sentence using 'translate into'.

The German PONS Collins says it's "translate (in)to".

I think it's safe to assume that both are correct. I would personally prefer "into", however.