There are multiple ways this can be done. Which one to pick is partly a matter of what method you'd prefer to use (arguably all methods are nearly equally good) as well as what tools you have available.
I'll start with the oddball or less-usual methods, just for the purposes of fleshing out the Answer for future readers but I'll end with the method I think you should use, particularly if you only need to do this once.
Obviously this can be done on a lathe, using standard turning techniques that I don't need to describe here. The only real difficulty might be in perfectly mounting the cylinder in line with the axis of rotation, especially if turning between centres.
As odd as it might seem this can be done on the table saw, and with surprising speed and efficiency, but you don't end up with the smoothest surface.
The method is to raise the blade just high enough that it will remove the amount of material you need, then carefully hold the dowel to the mitre gauge and slide the wood over the blade. You use either a series of passes or carefully rotate the dowel by hand, cutting the shoulder first and then nibbling away the rest of the material.
If you're doing a number of these this should be done using a simple jig to hold the work (easily made in just a few minutes). But just for one you can simply clamp two battens parallel to each other between which the dowel will be placed.
Mount a small straight-cutting bit in the router, then set the bit height much as you would for the table saw method above, just enough projection that you will mill off the amount of material needed to give you your final diameter.
You use the fence as a stop, positioned so that the near side of the bit will meet your shoulder line. You slowly push the dowel into the bit and rotate it with your fingers or by rolling with the palm of your hand. The bit will simply mill off the wood you don't need, leaving a very good surface.
There are a surprising number of ways of doing this using the drill press.
In theory at least you can do this using a suitable tenon cutter and possibly even a hole saw, finding ones of suitable size would be the problem.
The method given above for the router table gives a clue to what I think is the best method for doing this with a drill press, in theory at least. It's essentially the same method upside down, with the cutting tool positioned above the dowel and not below it, but the problem is the difficulty in finding suitable bits today to do this kind of cutting at the speeds that drills run at. Drill router bits were relatively common only a few decades ago but now have almost disappeared. However, with a little creativity this may be feasible using a Forstner or similar bit.
As the Comment above from keshlam suggests this could also be done as a turning operation on the drill press (the workpiece being held vertically). While I don't agree personally I should mention that many people don't like the idea of using the drill press this way as they believe it puts too much sideways stress on the bearings. Doing it lathe-fasion on the drill press if you want to turn down to size using any type of chisel you need to rig up a vertical tool rest off to one side, but without a rest you can do this quite easily with a file held in the hands. Stop and check your diameter frequently! It would be very easy to overshoot the mark.
Almost all of the machine operations have one critical flaw, that really you could do with running a test (possibly more than one) to check your setup before committing to doing the work on the finished piece. Doing it by hand you can more safely start work directly on a single piece because the rate of material removal is far easier to control working at handtool speeds.
This is the method I think you should use if you only need to do it once or twice.
You need only one saw, a sharp cutting tool and a file to smooth out and refine the shape (or abrasive wrapped around a block of wood).
First step is to mark your shoulder line on the dowel, and the diameter you need on the end grain using a compass or dividers.
Then you carefully saw down to the required depth at the shoulder line, working around the circumference. If you're not confident you can saw to the correct depth don't worry, err on the side of caution and deliberately saw shallow. You can easily make up for this in the following steps.
Now you simply pare or whittle away most of the wood that needs to come off, working either towards or away from the shoulder as you prefer and according to the grain direction. You can use a chisel or sharp knife here, even a marking knife can be used for this sort of thing if it's sharp enough.
Once you are down close to your desired diameter either switch to using the file or sandpaper, or stop paring/whittling and begin to scrape the wood with the edge. Final smoothing should be done with a file or abrasive paper, always backed with a hard block.
It might sound crude but this method is capable of achieving very good accuracy if you work slowly and carefully and stop to check your diameter on a regular basis — you'll feel like a chump if you go to this much trouble only to remove too much material and end up with a loose fit :-)