A search for the rare $\eta$ $\to$ $\mu^+\mu^-\mu^+\mu^-$ double-Dalitz decay is performed using a sample of proton-proton collisions, collected by the CMS experiment at the CERN LHC with high-rate muon triggers in 2017-2018 and corresponding to an integrated luminosity of 101 fb$^{-1}$. A signal having a statistical significance well in excess of 5 standard deviations is observed. Using the $\eta$ $\to$ $\mu^+ \mu^-$ decay as normalization, the branching fraction $\mathcal{B}(\eta$ $\to$ $\mu^+\mu^-\mu^+\mu^-)$ = [5.0 $\pm$ 0.8 (stat) $\pm$ 0.7 (syst) $\pm$ 0.7 ($\mathcal{B}_{2\mu}$)] $\times$ 10$^{-9}$ is measured, where the last term is the uncertainty in the normalization channel branching fraction. This work achieves an improved precision of over five orders of magnitude compared to previous results, leading to the first measurement of this branching fraction, which is found to agree with theoretical predictions.