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The Argentine forward made 16 appearances for Racing last season, impressing with four goals as they finished fifth in the Argentinian Premier Division.
Farina joins compatriot Lisandro Lopez in the Portuguese capital, and is Benfica manager Jorge Jesus' sixth major signing ahead of the new season.
A statement on the club's official website confirmed details of the 22-year-old's move.
"Offensive midfielder Luis Farina is the new player of Benfica. He signed this morning a deal for the next five years," it read.
"Luis Farina is 22 years old, and played for Racing Club since 2009-10.
"The Argentinian likes to play on the left side of attack, but also in the centre.
"He is fast and likes keeping possession. He also can score goals, but prefers to assist team-mates."
