The Collaborative International Dictionary of English v.0.48:

Labialize \La"bi*al*ize\, v. t. (Phonetics)
   To modify by contraction of the lip opening.
   [1913 Webster]

WordNet (r) 3.0 (2006):

labialize
    v 1: pronounce with rounded lips [syn: round, labialize,
         labialise]