wall in Basement

I'm finishing my basement and there's one 4 foot wall where I can't put up the drywall. (it would stick out further than the wall ajoining it)

I was wondering if I "drylock" the concrete first. Can I just put plaster or something along those lines directly on that wall and smooth it out to align it with the drywall butting up against the side of it. Then prime and paint it.

Please help.