The Welsh club, who lost Gylfi Sigurdsson to Everton this month, were tipped in pre-season to be involved in a relegation dogfight.
But Clement believes the arrival of Sanches will provide his side with a significant boost.
"I'm delighted to secure his services," Clement told Swansea's official website.
"He is a player I know well having worked with him for six months at Bayern Munich before my own move to Swansea.
"He is one of Europe's elite young talents who has already achieved a lot for his age, including winning Euro 2016 with Portugal.
"Having moved from Benfica to Bayern Munich, he has not played as much as he would have liked. But this move to Swansea and the Premier League will provide him with a real positive development experience.
"As a player he is a dynamic, powerful central midfielder who I believe has all the attributes to suit the Premier League."
Sanches follows Roque Mesa, Sam Clucas, Erwin Mulder and Chelsea loanee Tammy Abraham in making the move to the Liberty Stadium in this window.