Remove any cracked or loose plaster along the edge of the painted plaster ceiling. This includes scraping away any flaking paint as well as plaster that may have cracked during the cutting process.
Mix a plaster compound designed to patch plaster rather than drywall. Check home improvement stores and lumberyards for this type of material. Mix the dry powder with water according to manufacturer’s instructions to produce a paste.
Dampen the old plaster slightly with water before applying a thin coat of the plaster compound to the joint. Place the drywall tape into the mud, and press it in place by running a drywall knife down the seam. Allow the material to dry overnight.
Sand any rough spots smooth before applying a second coat of the plaster compound to the seam. Use a wider drywall knife to spread a thin layer across a wider space surrounding the seam. Taper the edges to produce as smooth of a transition as possible. Allow the material to dry overnight.
Smooth the surface by sanding a second time. Apply another thin layer of plaster over the seam using a wider drywall knife, or do multiple passes with a narrower knife. The intent is to spread the plaster over an area as wide as 2 feet with the edges smoothed to form a transition that is smooth to the touch between the plaster, seam and green board.