Cook fettuccine according to package directions in a large pot of boiling water. Drain.
Meanwhile, melt butter in a large skillet over medium-low heat. Add onion and garlic; sauté until golden.
Remove from heat. Add cream cheese and milk; stir until smooth.
Add sherry, Parmesan cheese, salt, and black pepper. Stir and cook for an additional minute over medium heat until just bubbly.
Add cooked fettuccine to the sauce, stir to coat pasta. Garnish with chives and serve immediately.