This paper presents distributed output feedback control of a class of distributed linear parameter varying systems with a parameter-dependent time-varying delay. A delaydependent bounded-real lemma approach, based on parameterdependent Lyapunov-Krasovskii functionals, is used to formulate the synthesis condition in terms of linear matrix inequalities. We demonstrate the efficacy of our result by applying it to formation control of multi-agent nonholonomic mobile robots.