Reports in Spain on Monday indicated that Atleti had triggered Felix's release clause and was set to announce the signing.
The 19-year-old is believed to be wanted by Europe's top clubs after scoring 20 competitive goals during an exceptional debut season in Benfica's senior squad.
Benfica insist no agreement is in place with any club, describing the reports as "fake news" in a statement issued on its website.
The Primeira Liga outfit further refuted claims that agent Jorge Mendes, whose clients include Cristiano Ronaldo, stands to make a considerable sum for arranging Felix's purported switch to LaLiga.
"In view of the news published in these last hours, Benfica clarifies that it is false that any negotiation process is currently underway regarding a possible transfer of the player Joao Felix," the statement read.
"The conditions for his negotiation are public and known, taking into account the termination clause defined in the amount of €120million.
"More serious, and that which deserves our most vehement repudiation and denial, is the fake news that refers to negotiations that involve commissions of 30 per cent and which, unfortunately, was echoed in Portugal by the newspaper A Bola, with intentions and goals that we do not understand.
"We repeat: this information is totally false, absurd and has clear intentions for the reputation and dignity of Benfica."
Should Joao Felix eventually find his way to Atleti, it would likely be as Antoine Griezmann's replacement, the France forward having made clear his desire to leave the Wanda Metropolitano.