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This study considers the problem of target localisation with a coherent processing technique for distributed multiple-input multiple-output radar systems. To enable the coherent processing technique, dual-frequency transmitters are employed to eliminate the stochastic phases of complex fading coefficients, which are caused by target angular fluctuations. And then a two-step procedure is introduced to accomplish the target localisation. In the first step, the amplitudes of the complex fading coefficients are estimated. In the second step, the target position is obtained using the MUSIC algorithm with modified target steering vector. With the amplitudes estimated, the target localisation performance is improved. The Cramér-Rao bound (CRB) for target localisation accuracy is derived with precise knowledge of radar positions. The CRB is shown to be inversely proportional to the frequency difference between the transmitted signals. With the radar positions uncertainty, the average asymptotic performance of the proposed method is given. Finally, numerical examples are given to validate the proposed method and the theoretical analyses.