A distribution website, is a site that is hosting malware for download. These are often download links embedded into malicious doc's or executable's code for example. Compromised websites are also highly used here.
If you are hosting malware on your server. Stop and remove this, this is illegal. This can lead to your site being flagged as suspicious by search engines causing accessibility issues for visitors. If a hacker is hosting malware on your site, then it's also likely compromised.
Remove any maliciously hosted files, check for signs of compromise. Clean up any infected files.