Let's compare the approximate values of these units:

1. Kilometre (km): $1 \text{ km} = 10^3 \text{ m}$
2. Astronomical Unit (AU): The average distance between the Earth and the Sun, $1 \text{ AU} \approx 1.496 \times 10^{11} \text{ m}$
3. Light-year (ly): The distance light travels in one year in a vacuum, $1 \text{ ly} \approx 9.461 \times 10^{15} \text{ m}$
4. Parsec (pc): The distance at which one astronomical unit subtends an angle of one arcsecond, $1 \text{ pc} \approx 3.086 \times 10^{16} \text{ m}$ Comparing these values, $1 \text{ km} < 1 \text{ AU} < 1 \text{ ly} < 1 \text{ pc}$. Therefore, the Parsec is the largest unit of distance among the given options.