Hi,
unfortunately I don't have installed DIAB on my machine, but with DIAB toolchain it should be similar. Right click on project name -> Properties -> Settings and choose Cross Settings:

Then press Apply button. You will see new section -Flash Image in settings:

If there is no such option - you may add a post build step with command:
mb-objcopy -O srec your_elf_file.elf your_srec_file.srec

Jiri