Hello Ajay!
The LSA type 4 is used when you have multiple areas as well as an Autonomous System Border Router (ASBR).
First of all, an ASBR is a router that has at least one interface in an OSPF area (area 0 or otherwise) and at least one interface in another Autonomous System (i.e. a region of your network running another routing protocol, static routing or another autonomous OSPF implementation). The ASBR sends type 5 LSAs (external routes) to its OSPF area(s). The type 5 LSAs are flooded to all areas. However, they do not contain the necessary information to FIND the ASBR. The ABRs (which connect OSPF areas) which receive these type 5 LSAs will also send out a type 4 LSA to all other areas to inform all routers of the location of the ASBR. (This is quite well depicted in Rene’s original post with diagrams).
So, the type 4 LSA informs all other areas of the location (or the IP address) of the ASBR so they know the path that must be taken to reach the external routes advertised by the type 5 LSAs.
I hope this has been helpful!
Laz