The 28-year-old had become surplus to requirements at Inter, having been with the club since summer 2003. He made nine appearances in Serie A last season, along with three as a substitute in the UEFA Champions League. He also played five times in the Coppa Italia run, but missed out on the final triumph against AS Roma because of international commitments.
An international since 1999, former Panathinaikos FC player Karagounis had the distinction of scoring the opening goal of UEFA EURO 2004™ in a 1-0 victory against Portugal. However, he was to sit out the final through suspension, when a repeat scoreline against the host nation gave Greece the trophy.
"I am very proud to be here and my ambition is to help Benfica win some trophies," Karagounis said. "Benfica are a great club, they have won the European Champion Clubs' Cup twice and have a very rich history. I have joined a very good team."
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