The 19-year-old spent the second half of the last campaign on loan at Villarreal and will now ply his trade in Portugal for a year to gain further valuable first-team experience.
"Atletico Madrid and Porto have reached an agreement for the transfer of Oliver Torres," a press release on the club's website read.
"The attacking midfielder, 19, will play on loan until 30 June in the ranks of the Portuguese side coached by Spaniard, Julen Lopetegui, after which time he will return to los Rojiblancos.
"The youngster, who already played on loan at Villarreal since the opening of the January transfer window last season, will continue to accrue experience in one of the strongest teams of Portugal.
"From the club, we wish Oliver the best of luck in this new stage of his football career."
Torres started one game for Atletico last season, scoring one goal and creating one assist for the Liga champions.