The deal includes an option for the Premier League club to make the move permanent for a reported €50 million (£42.8m).
Fernandes, 21, came through Benfica’s famed academy and established himself in the first-team squad in 2018, going on to make 22 Primeira Liga appearances last term.
His form early last season saw Fernandes earn a two Portugal caps, but he fell out of favour at Benfica at the start of last year.
Only one of his 11 Primeira Liga starts last term came in 2019, while he has also lined up just twice in 2019-20 prior to joining Spurs.
A technically gifted and creative midfielder, Fernandes was also rumoured to have interested West Ham, but Spurs managed to complete his capture to ease their midfield issues.
Moussa Sissoko is facing a prolonged spell on the sidelines with a knee injury, Tanguy NDombele has struggled with niggling fitness issues and Christian Eriksen’s form is a cause for concern, with the Dane seemingly set to leave the club before the start of next season.
Fernandes could make his debut at resurgent Watford this Saturday.
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