Luiz, who has signed a five-and-a-half year contract, joins Chelsea as the third Brazilian in the current squad, linking up with former Benfica team-mate Ramires and fellow central-defender Alex.
He said: 'I am delighted to be joining a big English club, and I know very well the quality that Chelsea has.
'It is a major challenge for me but I am determined and confident in my ability to adapt to this excellent league, and I look forward to meeting my new-team mates.'
Now 23, David Luiz Moreira Marinho was born on April 22, 1987 in Sao Paulo and began his career with Esporte Clube Vitoria in Bahia where he made 47 appearances.
The 6ft 2in defender, who is renowned for his skill on the ball as much as his defensive ability, switched to Benfica, initially on loan in January 2007 before making the move permanent that summer.
In total he made 82 league appearances for the Lisbon club missing just one game last season as they wrapped up a first league title in five years. Uefa.com voted Luiz the league's Player of the Year.
Luiz, who made his Brazil debut against America last year, will not be eligible for Champions League football this season after completing all six of Benfica's group games. They finished third behind Schalke and Lyon.
He also represented his country at the 2007 Under 20 World Cup, and can cover at either left or right-back.
Chelsea chief executive Ron Gourlay said: 'David Luiz is one of the great defensive prospects in world football, and already a Brazilian international. I am sure he will prove a valuable addition to the Chelsea squad.'
Chairman Bruce Buck added: 'It is a delight to have completed this transfer for a fantastic young footballer who we have admired for some time. David has played in the Champions League and the squad now has a more experienced look to it that will hopefully serve us well for the rest of this season and going forward.'
The deal will also take midfielder Nemanja Matic to Benfica in the summer, though the Serbian will remain a Chelsea player until his loan deal with Dutch club Vitesse Arnhem is completed at the end of the season.
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