The Portuguese capital club have secured the services of the promising Dutchman, who was removed from his country's provisional Euro 2012 squad last week
The 20-year-old attacker has signed a five-year contract with Benfica, with a €45 million release clause written into the deal.
The exact transfer fee has not been announced by either club, but Portuguese sources claim John has cost Benfica €9m.
It is believed that John caught the eye of Benfica during the Champions League play-off round between the two clubs, which the Portuguese giants won 5-3 on aggregate.
John, who broke into Twente's first team in 2010, had been included in the Netherlands' Euro 2012 provisional 36-man squad, but was one of the nine players who were removed by coach Bert van Marwijk earlier in May.
He has become the second summer signing made by Benfica, following in the footsteps of Gil Vicente's Hugo Vieira.