Router table with at least a 2 1/4hp router Multiple passes--my limit is 1/8 th inch per pass.
The thin lip needs to fit under the rabbet. It is really a matter of the total width of each piece as to how big the diameter needs to be. Perhaps you could pass the lip through a table saw to reduce the amount you want to remove. The red line in the illustration shows where to make the table saw cut.
I would also prefer to cut the rabbet on the other edge on a table saw with a dado stack buried in a sacrificial fence. Depending on how many feet of this you're cutting, this will save a lot of wear and tear on your expensive cove bit.
Looks to me to be about 3/8ths deep on both lip and rabbet, if that's 3/4 stock. In ffact, you could use the table saw with dado stack to cut the coved side to the correct thickness, preferably after you make the diagonal cut. That will be that much less to take off with the cove bit, which might allow you to use a smaller cove bit. I would not do ALL of this on a router since a table saw assist is MUCH faster.