Mikel Arteta has been linked to numerous players in the transfer market as Arsenal looks to strengthen after failing to qualify for the Champions League.
Youri Tielemans and Vitinha were among the names suggested to bolster the midfield of Arsenal, which already has Granit Xhaka, Martin Odegaard, Thomas Partey and Mohamed Elneny to call upon.
Arsenal instead opted to bring in Vitinha's Porto team-mate Vieira on a long-term deal, the club announced.
"I am very excited that we have identified and signed such a special talent," Arteta said. "Fabio is a very creative player that will bring high quality and versatility to our attacking play.
"We welcome Fabio and his family to our club and are looking forward to starting work with him ahead of the new season."
Vieira will offer Arteta another creative outlet going forward, the 22 year-old recording the most assists (14) among Porto players in the 2021-2022 Primeira Liga campaign.
The midfielder also scored six league goals and ranked joint-fifth for chances created (34), while playing 27 times.
Arteta will hope Vieira can provide capable support to the likes of Odegaard, Bukayo Saka, Gabriel Martinelli and Eddie Nketiah as Arsenal looks to improve on its fifth-place finish in the Premier League.
Victor Osimhen, Noa Lang and Gabriel Jesus have all been linked to fill the void left up top by the departures of Alexandre Lacazette and Pierre-Emerick Aubameyang.
Gunner technical director Edu, who was thrilled with the move, suggested there was more to come in the transfer market.
"We are so pleased to have completed the signing of Fabio from FC Porto," he said. "Fabio is a player with special qualities who is comfortable with the ball in the final third of the pitch.
"We are all looking forward to working with him and enjoying his future contribution to Arsenal. We will now continue to work hard and are looking forward to finishing this transfer window as strongly possible."
Vieira has been handed the number 21 shirt.