This paper presents a parameter-dependent design of feedback compensator with space-varying gains for Mittag-Leffler stabilization of linear time fractional parabolic MIMO partial differential equations subject to space-varying diffusion and reaction coefficients. In the proposed design method, under a boundedness assumption, the reaction coefficient is written in a parametric form. By using the parametric form for the reaction coefficient and multiple non-collocated observation outputs, an observer-based state feedback compensator with space-varying gains is then constructed such that the resulting closed-loop coupled equations are Mittag-Leffler stable. By applying the Lyapunov technique with Caputo fractional derivative and variants of Poincaré–Wirtinger’s inequality, a sufficient condition for the existence of such feedback compensator is presented in terms of standard linear matrix inequalities. Finally, simulation results are presented to support the proposed design method.