The 19-year-old has been tipped to have a bright future in his homeland and links up with compatriot Leonardo Jardim at Stade Louis II.
Silva has made just two senior appearances for Benfica, but Monaco deputy CEO Vadim Vasilyev is hopeful the attacking midfielder can make a contribution in Ligue 1.
"We are pleased that Bernardo Silva is joining us," he said.
"We have followed him for a while as he is part of the great talents of the future of Portuguese football.
"He will now be able to learn alongside our experienced players and bring us all his qualities."
Silva, whose deal includes an option to make the move to Monaco permanent, has represented his country at both under-21 and under-19 level.
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