Lynagh, a former England Under-20 player and son of Australia legend Michael, was born in Treviso, in Italy, and is eligible to play for England, Australia and Italy.
The 23-year-old wing was called up by England under former head coach Eddie Jones but failed to win a cap and has been overlooked completely by Steve Borthwick since he took over in December 2022.
"It's been a difficult decision to leave my boyhood club but I feel the time is right for a new challenge in Italy," Lynagh said.
"I have lived in England since I was four years old, but Italy and Treviso have always been in my heart.
"My father played a fundamental role not only in my rugby career, but also in my life. He always wanted the best for me and always agreed with every decision I made.
"He told me that playing in Treviso will be the best for me and my style of rugby."
Lynagh has made 58 appearances for Harlequins and scored 27 tries, including two in their 2021 Premiership final victory at Twickenham.
Rugby family: younger brother Tom, of Queensland Reds, and father Michael (Russell Freeman/AAP PHOTOS)
Benetton, meanwhile, are riding high in the United Rugby Championship with only Irish side Leinster above them in the table.
Lynagh made his senior Quins debut in 2019 and enjoyed his breakout season in 2020/21, making 11 appearances and scoring six tries. He touched down in the Premiership semi-final against Bristol Bears, before scoring twice in the final against Exeter.
Quins director of rugby, Billy Millard, said: "Louis has been a pleasure to work with and we have been proud to see him develop from our Academy to the first-team squad. He has certainly had some great moments in his short career to date and is a popular figure across the Club.
"His 2020/21 season in particular showcased his ability and try-scoring strength. We're excited to watch his career develop further at Benetton, and potentially for Italy. We wish him the very best as he seeks to build his career in Italy."
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